Auction of 41 coal blocks announced by PM Narendra Modi is expected to invest ₹ 33,000 crores with revenue sharing private miners with the government.
To reduce imports and increase state revenues, India has completely opened commercial coal mining to private mining sectors through an auction to increase coal production in own country.
The auction of 41 coal blocks announced by Prime Minister Narendra Modi is expected to attract 33,000 crore rupees by 41 coal blocks in the investment of revenue-sharing private miners with the government.
Thursday's decision to auction the coal block formalizes the decision to start a new process to award coal and lignite blocks to last month's Cabinet Committee on Economic Affairs. The blocks are located in Madhya Pradesh, Chhattisgarh, Jharkhand, Odisha and Maharashtra.
“Self-sufficiency is not possible without a strong mining and mineral sector; Because minerals and mining are important pillars of our economy. After these reforms, now coal production and the entire coal sector will become self-reliant. Now the market for coal has opened up; Therefore, any region can buy as per its requirements, ”Modi said at the launch of the auction.
There will be no restriction on the sale and use of coal from mines. Earlier, the blocks were awarded on a fixed pay per ton basis, which the government believed was hurting production.
Despite hosting the world's fourth-largest coal reserves, India imports around 235 million tonnes (mt) of coal a year, of which about 135 million tonnes tr 1.71 trillion can be sourced locally.
Coal, Mines and Parliamentary Affairs Minister Prahlad Joshi said that this auction process is at the inauguration of the Indian coal sector for commercial mining and will enable the country to meet its energy needs and achieve self-sufficiency in economic development. Said at launch.
According to the Ministry of Coal, these 41 mines are expected to produce up to 222 million tonnes, with India producing about 15% of India's coal production in 2225–27. The mines are expected to attract capital investment of around ₹ 33,000 crores over the next 5-7 years, adding Rs 20,000 crore annually to the state government's revenue.
“Auction of commercial coal mining is completely different from the earlier regime of restricted areas. Now, there are no such restrictions at all. The auction has terms and conditions that are very liberal, allows new companies to participate in the bidding process, reduces the advance amount, adjusts the advance amount against royalties, encourages flexibility for operating coal mines For liberal efficiency parameters, transparent bidding process, 100% Ministry of Coal said in a statement that automatic route based on the National Coal Index allowed and FDI through appropriate financial terms and revenue sharing model.
Here's the complete list of auctioned coal blocks:
Modi also said that India plans to produce 100 million tonnes of coal gas by 2030, an investment of ₹ 20,000 crores will be required. Steps like coal gasification will help save the environment, he said.
The government is trying to increase coal production through revenue share method and has auctions 50 coal blocks and 500 minerals blocks, and recovering around 1 billion tons of coal from state own coal mines. The investment will be Rs 50,000 crore to build transportation infrastructure.
New Delhi's push to increase the production of natural resources to kick-start economic development with the private sector as a key stakeholder comes at a time when the window for fossil fuels is closing rapidly, and The global energy landscape is evolving rapidly. Fundamental changes have occurred in investment culture amid rising climate concerns.
“The launch of the auction process for commercial coal mining is a transformative reform in the energy sector. However, environmental concerns and allowing delays on coal projects may result in silent interest from international investors. Ramanuj Kumar, the partner of Cyril Amarchand Mangaldas, said that we expect strong interest from domestic mining and power companies as the bid terms are attractive compared to other mineral auctions.
Modi said that while implementing the coal reforms, it has been kept in mind that India's commitment to protecting the environment will not be weakened.
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