“The auction methodology based on revenue-sharing model has been approved by the Cabinet,” sources said adding the formal announcement is likely to be made soon. They said auction of about 50 coal blocks, including some large mines, will be kick-started very soon, they said.
New Delhi: India will soon begin auction of coal blocks for commercial mining purpose as the Union cabinet led by Prime Minsiter Narendra Modi on Wednesday approved the methodology which puts an end to the monopoly of state-run Coal India. “The auction methodology based on revenue-sharing model has been approved by the Cabinet,” sources said adding the formal announcement is likely to be made soon.
They said auction of about 50 coal blocks, including some large mines, will be kick-started very soon, they said.
ET had on Monday reported that the government is likely to offer major rebates on revenue share to winners of commercial coal block auctions in order to draw investments from local and global miners amid the coronavirus pandemic.
With easy entry and exit norms for commercial coal auctions the government expects participation from Indian companies like Hindalco, Jindal Steel & Power, JSW Energy, Adani Group and Vedanta besides global miners like Peabody, BHP Billiton and Rio Tinto.
Companies that start early production from the blocks will be offered 50% rebate on revenue share payable to the government. The rebate will start from the day of production till the scheduled commencement date of mining agreed at the time of award of the block, sources said.
Similarly a rebate of 50% of revenue share is proposed to be given on coal produced in excess of the scheduled target in a financial year. A further rebate of 20% on revenue share is proposed on coal used for gasification or liquefaction purposes, they said.
Finance minister Nirmala Sitharaman had on Saturday announced opening up commercial coal mining with auction of 50 blocks in the government’s fourth tranche of Rs 20 lakh crore Atma Nirbhar Bharat stimulus.
Sitharaman had said there will be no eligibility conditions for participating in coal auctions and any firm would be able to bid by making upfront payment. A floor price of 4% of the revenue share is proposed for the auction.
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