Commercial coal auctions transform India’s mining sector, boost revenue and jobs
New Delhi, Sept 14 (TNT): Commercial coal mine auctions introduced in 2020 have emerged as a major structural reform in India’s mining sector, bringing transparency to coal block allocation and generating significant benefits for states, industry and coal-bearing communities.
The reform followed the Supreme Court’s cancellation of 204 coal blocks in 2014.
Prime Minister Narendra Modi launched commercial coal mine auctions on June 18, 2020, marking a shift towards a transparent and rules-based allocation process.
The auction process is conducted online in two stages through the MSTC platform, with bid documents decrypted and opened live in the presence of bidders.
The policy imposes no end-use restrictions and permits 100 per cent FDI through the automatic route.
Upfront payments have also been kept low and are adjustable against future revenue share, allowing smaller and newer players to participate.
As many as 147 coal mines have been auctioned so far, with 44 new companies winning coal blocks.
The process has also attracted traditional public sector coal producers, with Coal India’s subsidiaries Western Coalfields Ltd and Northern Coalfields Ltd participating as bidders in recent auctions alongside private companies.
The auctioned blocks generate revenue for states through competitively bid revenue share in addition to statutory royalty, District Mineral Foundation (DMF) contributions, National Mineral Exploration Trust (NMET) contributions and GST.
Since 2020, 147 coal blocks have been auctioned across nine states and are projected to generate around Rs 47,500 crore in annual revenue, Rs 55,000 crore in capital investment and 4.9 lakh jobs.
Revenue generated through upfront and premium payments from allocated commercial mines stood at around Rs 3,090 crore in 2025-26.
Coal production from commercial mines also increased from 12.55 million tonnes in 2023-24 to 23.51 million tonnes in 2024-25.
Captive and commercial coal blocks together produced around 210 million tonnes in 2025-26, crossing the 200 million tonne mark for the first time.
A decade earlier, captive and commercial blocks had produced 28.8 million tonnes, representing a compound annual growth of around 22 per cent over the period.
The increased domestic production is expected to reduce dependence on coal imports and support the country’s efforts towards greater self-reliance in energy.
The commercial coal auction regime, with technology-enabled bidding, wider participation and a revenue-sharing framework covering royalty, premium, DMF and NMET, has strengthened the role of states, industry and local communities in India’s coal sector while contributing to energy security.
TNT KS
