Boost for Domestic Coal Production as CIL Hands Over Discontinued Mines to Private Sector
State-owned mining major Coal India Limited (CIL) has taken an important step towards augmenting domestic coal availability by awarding rights to 23 previously discontinued underground mines to private operators. The move is expected to unlock an estimated 35 million tonnes of annual production capacity that was lying idle.
The awarded mines, located across key coal-bearing states like West Bengal, Jharkhand, Maharashtra and others, come with functioning mining infrastructure still in place. Successful bidders will work the mines under a revenue-sharing model, agreeing to pay CIL a minimum 4% stake of earnings over the 25-year contractual period. This establishes a viable public-private cooperation framework to efficiently extract coal reserves left untapped due to projects becoming commercially unviable for CIL to independently operate.
Of the total 34 high-quality mines initially identified by CIL for private revival, the first batch of 23 mines transacting to private hands hold estimated reserves of over 635 million tonnes. CIL is continuously scouting additional discontinued projects that can be tendered similarly. Bringing idle resources back into production aligns with the nation's objective of raising overall coal availability to over 1 billion tonnes annually while also attracting private sector investments and operational expertise into the sector.
In another development, the coal ministry's latest commercial auction round opening shortly will bid out mining rights to 60 further mines located across eight major coal bearing states. Successful auction concludes are expected to collectively contribute 380 million tonnes of incremental output by 2030, playing a critical role in India's energy security.
