Coal India (CIL) jumped 5.52% to Rs 136.65 after Prime Minister Narendra Modi on Thursday launched the auction for 41 coal mines for commercial mining.
According to the coal ministry, these 41 mines are expected to hit peak production of 225 million tonne (mt) and will account for around 15% of India's total coal production in 2025-26. The government's decision to open up the coal and mining sector will help bring in more competition, capital and technology into the sector.Commercial mining will add Rs 20,000 crore annually to the state governments' revenue. Also, the implementation of a National Coal Index will help India move towards a free market structure for coal. There will be no restriction on the sale and utilisation of coal from these mines.
Shares of CIL spurted on hopes that higher competition will increase the efficiency of the state-run coal major.
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