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India To Auction 41 Coal Assets

Coal

India’s coal sector is in the limelight following a series of recent government decisions.

A new study by data analytics company GlobalData shows that India and a few other countries would step in to bolster an anticipated about 7.8% drop in U.S. coal production this year.

In late June, India’s Prime Minister Narendra Modi announced the launch of an auction for 41 of India’s coal mines for commercial purposes.

While the government called it a “big ticket reform,” some opposition party leaders and experts have opposed it and expressed reservations about the move.

The prime minister’s announcement to award coal and lignite blocks on a revenue-sharing basis has ended almost seven decades of policy curbs in the coal sector.

The designated 41 mines are expected to hit peak production of 225 million tons (mt) and will account for around 15% of India’s total coal production in 2025-26, Livemint report. What’s more, the government claims they will add billions of dollars annually to the public treasury.

But heads of provinces, like Chief Minister of the Indian State of West Bengal Mamata Banerjee, have asked the federal government to reconsider, the Economic Times reported.

In a letter she wrote to Modi, Banerjee said this policy could neither bring foreign direct investments nor technologies or knowhow in the mining sector, as claimed by the Government.

Those like Banerjee who are opposing this move are perplexed by the auction call, since the interest of global investors is moving toward renewable energy projects as opposed to coal mining projects.

Some claimed this seemed to be a “desperate attempt” at reviving India’s coal industry. There’s enough evidence to show that India had begun moving away from coal and that coal demand was dying, so what anyone will do with the newly mined coal is one of the questions being raised.

But the Indian government’s stance is that India’s newly launched program of self-reliance cannot achieve success without a strong mining and mineral sector, which is why reforms in the coal sector had been initiated. At the same time, it claims, it remained committed to protecting the environment, which is why it had also launched the coal gasification program.

India has the world’s fourth-largest coal reserves, yet imports around 235 million tons of coal annually.

This auction process marks the opening of the Indian coal sector for commercial mining, helping India to achieve self-sufficiency in meeting its energy needs, according to Pralhad Joshi, India’s coal, mines and parliamentary affairs minister.

By AG Metal Miner

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