Cabinet approves new methodology for awarding commercial coal mines

Auctioned mines will now entail reduced upfront payment; coal ministry has also introduced incentive for early production

The Union Cabinet on Wednesday approved the auction methodology for commercial mining and sale of coal by private companies. This includes a new revenue-share model for bidding, eased eligibility criteria for bidders, and performance-linked incentives to boost coal production.
 

To improve investment sentiment in the coal sector, auctioned mines under the new methodology will have a reduced upfront amount. The coal ministry has also introduced incentive for early production. “There will be 50 per cent rebate to the mine owner in the revenue share paid to the state, in case of early production,” said the coal ministry.
 

The new methodology