The Coal Ministry has set a target of raising around ₹55,000 crore in the current financial year, ending March 2025, of which the major chunk of around ₹45,000 crore will be raised through commercial coal mine auctions.

“Our target for FY25 is ₹55,000 crore. Of this, around ₹9,000 crore is from mine developer cum operator (MDO)/ revenue sharing / washeries and the remaining ₹45,000 will come from auction of mines,” a senior government official said.

In FY24, the Ministry monetised ₹56,794.49 crore against the Niti Aayog’s target of ₹50,118 crore. Two rounds of auctions of commercial coal mines were launched and 20 mines were auctioned. During the year, seven mines obtained mine opening permission, while nine mines started production.

The Ministry monetised ₹50,316.66 crore via auctions, ₹5,276 crore through the MDO route as well as ₹985 crore and ₹225 crore through abandoned mines and washeries, respectively.

Currently, of the 107 commercial coal mines auctioned since June 2020, 11 blocks are in operations. These mines have produced around 15 million tonnes (mt) in FY24 and have a target of 23 mt in FY25.

Overall, the commercial and captive mines have produced around 147 mt coal in FY24 (higher by 26 per cent y-o-y) and the target for FY25 has been set at 170 mt.

The capex of coal mining PSUs in FY25 is around ₹24,500 crore, with Coal India’s (CIL) share at ₹19,850 crore, NLC India (₹3,040 crore) and SCCL (₹1,600 crore).

Mines auction

In the last four months, the Ministry has already achieved 26 per cent, or roughly ₹14,000 crore, of the total monetisation target. This is despite the elections, the official added.

The 10th round of commercial coal mines auction was launched in June 2024. The Ministry expects that this will conclude by November 2024 and around 15-20 blocks can be auctioned.

“After the 10th round, the Ministry will start the 11th round of auctions. It is expected to be concluded by March 2025. The mines on offer will be more than 50 blocks. More clarity will be there after the 10th round,” the official said.

Auctions planned

In FY25, the ministry expects to auction around 25 blocks. Besides, 14 mines are likely to obtain mine opening permission, while ten mines are expected to commence production.

Another top official said that commercial mines auctions have picked up and there is a growing interest from stakeholders.

“We are seeing a lot of interest coming from various sectors. Now, new enterprises are coming in coal mining. Many of the new auction holders are not from the coal mining sector. They are real estate players, traders, contractors, etc. They are taking coal as a long term business. That’s a new development that people who are not traditional coal users or were in this business are entering this sector,” he added.

The Ministry’s objective is to reduce imports. Besides, higher coal production can be diverted for gasification, which has huge potential going ahead for syngas, chemicals, etc. “See, if a private sector player has a mine and is able to meet his or her demand. After that, whatever is left, can be gasified and converted into chemicals. China is doing this in a big way,” the official pointed out.