- Single Window Clearance Launched to Speed up Operationalization of Coal Mines
- Coal Import Monitoring System Introduced
- Overall Coal offtake of CIL & SCCL in 2021 (up to Nov) Stood at 645.32 Million Ton
- Norms for Commercial Coal Mining Auction Liberalised
- In Two Rounds 28 Coal Blocks of Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra and Odisha Auctioned
- 99 Coal Mines placed on offer in the fourth and latest round Auction
- Note-worthy Achievements in Green Initiatives
POLICY/REFORMS AND DECISIONS
REFORMS
“Colliery Control (Amendment) Rules, 2021
With the objective of scrutinizing the relevance and requirement of various compliances as well as rationalizing, reducing and simplifying the related processes to enhance ease of doing business by doing away parallel compliances, Coal Mines (Conservation and Development) Act, 1974 (CMCD) and CMCD Rules, 1975 have been repealed reducing one Act from the compliance burden and Colliery Control Rules, 2004 have been amended vide Colliery Control (Amendment) Rules, 2021 which have been notified and published in the Gazette of India vide G.S.R. 546(E) dated 09.08.2021.
Mineral Concession (Amendment) Rules, 2021
Mines and Minerals (Development and Regulation) Amendment Act, 2021, carried out amendments in MMDR Act 1957. This necessitated amendment in the Mineral Concession (Amendment) Rules, 1960. Hence, MCR, 1960 have been appropriately amended vide the Mineral Concession (Amendment) Rules, 2021 which have been notified vide gazette notification G.S.R 717(E) on 01.10.2021.
With insertion of Rule 24C in the MCR, 1960, mining lease for coal or lignite is now granted to a Government company or corporation for 50 years. Mining lease granted before the MCR reforms of 01.10.2021 shall be deemed to have been granted for 50 years or till 31st March, 2030, whichever is later. State Governments are empowered to extend the mining lease for a further period of 20 years at a time for allotted mines.
With insertion of Rule 27A in the MCR, 1960, lessee of captive mine is allowed to sell coal or lignite up to such per cent (50%) of the total coal or lignite produced in a financial year after meeting the requirement of the end use plant linked with the mine. This provision is not applicable to a power project awarded on the basis of competitive bid for tariff including Ultra Mega Power Projects.
Central Government may, by notification in the Official Gazette and for the reasons to be recorded in writing, increase the said percentage of coal or lignite that may be sold by a Government company or corporation beyond 50%.
Rule 28 of MCR, 1960 has been amended providing for lapsing of leases where production and dispatch has not commenced within a period of two years from the date of execution of the mining lease or is discontinued for a continuous period of two years after commencement of production or dispatch. The mining lease shall lapse on the expiry of the period of two years from the date of execution of the lease or as the case may be, discontinuance of the production and dispatch.
Rule 64B has been amended providing that royalty shall be charged on run-of-mine coal or lignite irrespective of its processing within or outside the leased area.
![Year End Review – 2021 – Ministry of Coal 2 coal11](https://economyindia.in/wp-content/uploads/2021/12/coal11.jpg)
Launch of Single Window Clearance
The Union government launched Single Window Clearance portal on 11.01.2021 for the coal sector to speed up the operationalization of coal mines. It is a unified platform that facilitates grant of clearances and approvals required for starting a coal mine in India.
Setting up of Coal Import Monitoring System:
There is substantive time lag in DGCI&S providing import data. Consolidated import data is made available by DGCI&S after a time lag of 2 to 2½ months while disaggregated data comes only after 3 to 3½ months. This time lag in receiving data makes it deficient for taking any policy decision and reducing imports. Therefore, a Coal Import Monitoring System has been created jointly with the help of Ministry of Commerce& Industry
“The CIMS has been effective from 01.04.2021 i.e. Bill of Entry on or after 01.04.2021 for items as listed in this Notification shall be governed by CIMS. The facility of online Registration has been made available with effect from 15.02.2021”. Till 12.04.2021, 168 registrations under CIMS portal have been successfully carried out.
POLICY
Commercial Coal Mining:-
The auction-based regime introduced in 2014 allowed private sector participation, however, it was limited to captive usage in own end use plants. The sector has been opened up for commercial coal mining by private players in 2020 and first ever successful auction of commercial mining was launched by the Hon’ble Prime Minister on 18.06.2020 and concluded with allocation of 19 coal mines.
Commercial coal block auctions are conducted in a two-stage online bidding process, which involves technical screening and submission of competitive initial price offer in the first stage, and a second and final stage where better price offers are intended to be received.
Commercial coal mining auctions are completely different from the earlier regime of restricted sectors, use and price. Now, there are no such restrictions at all. The auctions have terms and conditions which are very liberal, allowing new companies to participate in the bidding process.
Reduced upfront amount, adjustment of upfront amount against royalty, liberal efficiency parameters to encourage flexibility to operationalize the coal mines, transparent bidding process, 100% FDI through automatic route is allowed and reasonable financial terms and revenue sharing model based on the National Coal Index.
So far, 28 coal blocks have been auctioned in the States of Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra and Odisha (details enclosed in Annexure). The estimated benefits which would accrue to the coal bearing State Government through the successful auction of above-mentioned 28 coal blocks is as under: –
S. No. | Name of the State | Number of Coal Mines Auctioned | Cumulative PRC of coal mine auctioned | Annual Revenue generated based on the PRC of mine (Rs. crore)* | Capital Investment (Rs. Crore)* | Total Employment (Direct + Indirect)* |
1 | Chhattisgarh | 5 | 8.2 | 1106.08 | 1,230.00 | 11,086 |
2 | Jharkhand | 8 | 20.6 | 2802.70 | 3,090.00 | 27,852 |
3 | Madhya Pradesh | 8 | 10.85 | 1712.71 | 1,627.50 | 14,669 |
4 | Maharashtra | 4 | 3.52 | 520.89 | 528.00 | 4,759 |
5 | Odisha | 3 | 19 | 1802.43 | 2,850.00 | 25,688 |
TOTAL | 28 | 62.17 | 7944.81 | 9,325.50 | 84,054 |
*Please note that the benefits for only the fully explored mines have been calculated for mines under Tranche 2 of commercial auctions since the PRC of partially explored mines was not available. However, while calculating the benefits from Tranche 1 coal mines of commercial auctions, benefits from both partially and fully explored mines have been considered as the PRC of both partially and fully explored coal mines was available.
![Year End Review – 2021 – Ministry of Coal 3 image002GAFS](https://economyindia.in/wp-content/uploads/2021/12/image002GAFS.jpg)
In 2nd round of auction for commercial mining, 11 coal blocks fetch single bids. Hence, it was decided by the Ministry to go for 2nd attempt of the said 11 coal mines. The last date of submission of Technical Bid was November 29, 2021. Bids received were opened on 30.11.2021. Total 7 bids were received for 4 coal blocks. The details of the 11 coal blocks offered in 2nd attempt of 2nd Round of Auction is enclosed as Annexure-B.
- 3rd round of auction 88 coal mines have been offered for auction. (details enclosed as Annexure-C). Production from the 28 successfully auction coal mines for commercial mining is yet to start.
Union Minister of Coal, Mines and Parliamentary Affairs Shri Pralhad Joshi launched the fourth and latest tranche of auction of 99 coal mines including 24 new mines on 16th December,2021.
After successful auction of 28 coal mines in the first two tranches and upon receipt of 53 bids for 20 coal mines under Tranche 13 of CM(SP) Act and Tranche 3 of MMDR Act, Ministry of Coal has now launched the auction process of 24 new coal mines (9new mines under Tranche 14 of CM(SP) Act and 15 new mines under the Tranche 4 of MMDR Act). With coal mines rolling over from third round of commercial auctions and 2nd attempt of second tranche of commercial auctions, there shall be a total of 99 coal mines on offer.
Of these 99 mines on offer, 59 are fully explored mines and 40 are partially explored. These mines are spread across eight coal bearing states of Jharkhand, Chhattisgarh, Odisha, Madhya Pradesh, Maharashtra, West Bengal, Andhra Pradesh and Telangana.
The list of mines has been finalized post detailed deliberations and mines falling under protected areas, wildlife sanctuaries, critical habitats, having forest cover greater than 40%, heavily built-up area etc. have been excluded.
![Year End Review – 2021 – Ministry of Coal 4 image0034BGX](https://economyindia.in/wp-content/uploads/2021/12/image0034BGX.jpg)
Setting up of Coking Coal Washeries: The Government plans to increase the supply of washed coking coal to the Steel sector from 3 to 15 MT. For this, two coking coal washeries have already been commissioned, three coking coal washeries are under construction, in two cases – Letter of Intent (LoI) has been issued and in one case- the tender is under evaluation. For Non-coking coal washeries – one non-coking coal Washery is under construction and in two cases of non-coking coal washeries, LoI has been issued.
Out of a total of Nine coking coal washeries:
- Two Coking Coal washeries constructed and operational
- Four under construction (3 Coking + 1 Non-coking)
- LoI / WO issued for two washeries
- One tendered and bid opened – Price Bid under evaluation
- Three more coking coal washeries in the 2nd Phase
DECISION
Sustainable Development Cell: Recognizing the importance of bringing sustainability in coal mining, a “Sustainable Development Cell” has been created in Ministry of Coal and also in all coal PSUs to promote adoption of better environmental management practices in coal mines, thereby providing a better environment to people working and residing in nearby areas and also improve the overall image of coal sector in the country.
GREEN INITIATIVE ACTIVITIES
Social & Environmental Responsibility– Green initiative activities undertaken so far:
![Year End Review – 2021 – Ministry of Coal 5 image004SEWR](https://economyindia.in/wp-content/uploads/2021/12/image004SEWR.jpg)
- Improve public perception of coal mining via Coal Mine Tourism- Four eco-parks completed, and foundation stone laid for five eco-parks till October 2021. Two more Eco- parks to be completed in 2021-22 and two each during 2022-23 and 2023-24.
Cumulative achievement of 5445 Hector and plantation of 130 lakh saplings (up to Oct 2021) against the target of 5400 Ha & 130 lakh plants for FY2020-22.
- Supply of mine water for domestic use and utilizing mine water for potable and irrigation purposes :–
Greening Initiatives: Bio-Reclamation/Plantation:
- Successful launch of Vriksharopan Abhiyan -2021: “Going Green Initiative” was rolled out by launching the Vriksharopan Abhiyan in August, 2021 in the presence of Shri Raosaheb Patil Danve, Minister of State for Coal, Mines and Railways, Secretary (Coal) and other senior officers of Ministry of Coal.
- Around 6.9 lakh seedlings of local species were planted covering an area of about 500 acres spread across 38 districts of 12 States (350 places) and 3.8 lakh seedlings were distributed amongst the local people for plantation in their areas.
- Vriksharopan Abhiyan continued with full vigor in coal fields paving the way for plantation of more than 44 lakh saplings over an area of 1750 Ha (Till October 2021) in and around coalfields of coal/ lignite PSUs.
![Year End Review – 2021 – Ministry of Coal 6 image005KYVH](https://economyindia.in/wp-content/uploads/2021/12/image005KYVH.png)
Utilization of Mine water for Community Use:
- Mine water supply by coal/lignite PSUs for community use (for 2020-21) has grown to 3165 LKL registering a rise of about 20% over the quantity achieved in 2019-20.
Environmental Audit/ Studies:
- The process of environmental audit of 35 mines of CIL by ICFRE has started and likely to be completed during 2021-22. Environmental audit of five mines of SCCL by ICFRE has been completed.
- The process of Ecological Study at 10 mines of CIL (7)/ NLCIL (3) has started.
COAL STATISTICS
Coal Production
- Overall coal production of CIL & SCCL in 2021 (Jan 21 to Nov 21) was 615.49 Million Ton (MT)
- Overall coal off take of CIL & SCCL in 2021 (Jan 21 to Nov 21) was 645.32 MT
- Coal dispatch by CIL & SCCL in 2021 (Jan 21 to Nov 21) to Power Sector was 516.35 MT
- Total E-Auction by CIL & SCCL in 2021 (Jan 21 to Nov 21) was 116.30 MT.
Power Sector Linkage Policy – SHAKTI:-
Implementation Status of Power Sector Linkage Policy (SHAKTI) dated 22.05.2017 and amended SHAKTI
Sl. No. | Activity | Timeline/Status |
A(i) | Sign FSA with pending LoA holders | Clearance given to Coal India Limited (CIL) to sign FSA with 9 LoA Holders having total commissioned capacity of 7210 MW. |
B(i) | Linkages to State/Central PSUs | As on date, 23 TPPs have been granted linkage for a total capacity of 25340 MW. |
(ii) | Linkages for IPPs having PPA based on domestic coal | First round of linkage auction conducted in September, 2017.Linkage booked by 10 plants of 9044 MW capacity for 27.18 MT quantity.FSAs have been executed with all the successful bidders. |
2nd round of SHAKTI B (ii) linkage auction concluded on May, 2019.Quantity of 2.97 MTPA booked by 8 bidders for a total capacity of 874.9 MW. | ||
PFCCL/Ministry of Power authorized to conduct future auctions. Auction has been conducted by PFCCL during May, 2020. 2.8 MTPA linkages have been booked by 5 successful bidders. | ||
Fourth round of linkage auction has been conducted by PFCCL in September,2021, where, 3.20 MTPA linkages have been booked by 5 successful bidders. | ||
(iii) | Linkages for IPPs without PPA | The linkage auction for SHAKTI B (iii) long/medium term was conducted in February, 2020.Out of the total offer of 11.8 MTPA, 6.48 MTPA was booked by 7 successful bidders. The average premium gained was 9%. |
(iv) | Earmarking Linkages to States for fresh PPAs | Coal linkage granted from Coal India Limited for the States of Gujarat, Uttar Pradesh and Madhya Pradesh for a capacity of 4000 MW, 1600 MW and 2640 MW respectively. |
(v) | Power aggregate of group of States | Coal linkage earmarked from Coal India Limited for a capacity of 2500 MW.Methodology under B (v) is to be formulated by Ministry of Power. Bidding under SHAKTI B (v) is to be conducted by Ministry of Power. |
(vi) | Linkages to SPV for setting up of UMPP | SBD under formulation by Ministry of Power. |
(vii) | Linkages to IPPs having PPA based on imported coal. | IMC submitted its recommendation. |
(viii) | (a) Short term linkage coal (b) Coal supply in case of termination of PPAs due to payment default by DISCOMs (c) Aggregation of Power by Nodal Agency under Para B (v) for a group of States even without requisition. (d) PSU to act as an aggregator of Power (e) Mechanism to ensure servicing of debt | – Auction for April – June, 2020 was completed on 19.03.2020. Out of 5.77 MT of coal offered by CIL, 1.34 MT was booked by 9 successful bidders at notified price. – Auction for July – September, 2020 was completed on 13.07.2020. Out of 4.91 MT of coal offered by CIL, 0.63 MT coal was booked by 8 successful bidders at notified price. – Auction for October – December, 2020 has been completed on 15.09.2020. Out of the 5.89 MT offered by CIL, 0.35 MT coal has been booked by 6 successful bidders at notified price. – Auction for January – March, 2021 has been completed on 21.12.2020. Out of the 5.97 MT offered by CIL, 0.64 MT coal has been booked by 7 successful bidders. – Auction for April – June, 2021 has been completed on 16.03.2021. Out of the 4.99 MT offered by CIL, 1.07 MT coal has been booked by 8 successful bidders. – Auction for July – September, 2021 has been completed on 15.06.2021. Out of the 4.49 MT offered by CIL, 0.82 MT coal has been booked by 8 successful bidders at notified price. – Ministry of Power vide O.M dated 30.08.2019 has communicated the adequate safeguards which may be considered. No action required from Ministry of Coal. Vide O.M. dated 17.05.2019 and subsequent reminder dated 29.05.2019, Ministry of Power was requested to communicate the same. – Ministry of Power vide O.M dated 05.08.2019 and 20.08.2019 has communicated the mechanism prepared in this regard. |
Thrust area for future research in Coal sector has been notified and a dedicated web site has been created for dissemination of information on research work.
Thrust area for future research in Coal sector has been notified and a dedicated web site has been created for dissemination of information on research work.
Promotional Drilling: A programme of Promotional/NMET (Regional) drilling comprising 1.38 lakh meters in coal and 0.12 lakh meters in lignite has been drawn up in Annual Plan 2021-22 of CMPDI. The programme is under execution by MECL, DGMs of Nagaland & Assam and CMPDI.
![Year End Review – 2021 – Ministry of Coal 7 image006V17J](https://economyindia.in/wp-content/uploads/2021/12/image006V17J.jpg)
As against this, the achievement of drilling upto the month of October, 2021 is 1.08 lakh metre, against the target of 0.89 lakh metre, which is 121% of the target.
Overall Progress of Detailed Drilling in 2021-22: For 2021-22, a target of 7.50 lakh metre of drilling (Departmental: 4.71 lakh metre, Outsourcing: 2.79 lakh metre) has been proposed. As against this, 3.80 lakh metre of drilling has been carried out upto the month of October, 2021 against the target of 3.92 lakh metre, which is 97% of the target. (PIB)