Overview

Ministry of Coal launched the first ever tranche of commercial auctions in June 2020, which was one of the first policy initiatives under Aatmanirbhar Bharat by Government of India. It paved way for liberalization of Indian coal sector enhancing efficiency, competition and private sector participation in the sector leading to development of a vibrant coal market, boosting economic growth and employment generation. Key features were:

• No restriction on sale and/ or utilization of coal
• No technical or financial eligibility criteria for participation
• Amended FDI Policy to allow 100% FDI under automatic route for coal mining
• Introduction of National Coal Index to create transparent market-based pricing mechanism
• Incentives for early coal production and adoption of clean technologies
• Migration to % revenue sharing mechanism from Rs./tonne-based auction
• Minimum number of Technically Qualified Bidders for valid auction reduced to 2 from earlier 3

Deal Highlights

• The first-ever commercial auction was launched by Hon’ble Prime Minister of India
• A total of 38 mines were on offer, of which 20 have been successfully auctioned and agreements have been signed in the presence of Hon’ble Home Minister and Hon’ble Minister of Coal and Parliamentary Affairs
• Of the 38 mines, 28 mines were CM(SP) mines and 10 were MMDR coal mines, of which 16 CM(SP) mines and 3 MMDR mines were successfully auctioned
• The floor price for these coal mines was 4% of the revenue share. However, the % revenue share quoted by the successful bidders ranges from 9.5% to 66.75%.

Few Successful Bidders