Coal blocks sold under the commercial mining auctions are expected to produce 53.77 million tonnes (mnt) of coal by FY2031-32 (FY’32), as per estimates provided by the Ministry of Coal (MoC).
This holds significance as the government is making efforts to scale up domestic coal availability by expediting the coal block allocation process.
Total coal mining capacity in the country was assessed at over 1 billion tonne (bnt) in FY’22.
At present, the auction process of 47 blocks has been successfully conducted. Of these, auction of one block was cancelled since the preferred bidder did not comply with the norms underlined in the scheme document.
The estimation has been prepared for 22 blocks that have already received vesting/allocation order and where the mining plan has been prepared.
Delay in mine opening
So far, only two commercial blocks, Gare Palma IV/7 and Gare Palma IV/1, have become operational. These have produced a total of 1.57 mnt coal in the first quarter of FY’23.
It is important to note that the cumulative peak rated capacity (PRC) for the 46 auctioned coal mines is 101.04 mnt per annum.
However, the slow progress in development of these blocks is primarily due to the delay on account of execution of efficiency parameters specified in the Coal Mining Development and Production Agreement that are to be fulfilled before receiving the mine opening permission.
In case of partially explored blocks where geological report is to be prepared, the time limit for obtaining mine opening permission is 66 months.
On the other hand, for fully explored blocks where geological report is available, the time limit is 51 months.
Thereupon, the coal block allottee would carry out mining operations in tandem with the approved production schedule in order to attain the peak rated capacity of the block.
Going forward, coal production from commercial blocks would gradually increase with allocation of new blocks in the ongoing tranche of auctions.
In the latest round of auction, the Coal Ministry has received 38 bids from 31 different firms for 24 blocks in the technical round. These include a fresh round of sale under the fifth tranche of auctions along with the second attempt of sale under the third and fourth tranches.
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