Decision on Advance Payment Relief for Partially Explored Coal Blocks

The Ministry of Coal has extended its decision to waive advance payment amounts to promote underground mining in partially explored coal blocks. Along with this decision, the ministry has emphasized increasing the country's coal production capacity amid challenges arising from the West Asian conflict.

According to a PIB Delhi report, the Ministry of Coal organized a stakeholder consultation on the theme 'Mining for Future' in Panjim, Goa. This one-day consultation included allocators of captive and commercial coal blocks, representatives of state governments, CGWA, DGH, MoEFCC, and senior ministry officials. The main objective of the meeting was to discuss the swift operation of allocated blocks, upcoming policy reforms, and responsible mining.

Coal Ministry Secretary Shri Vikram Dev Dutt was present as the chief guest. Additional Secretary and Nominated Authority Smt. Rupinder Brar and other senior officials of the ministry were also present on the occasion. Addressing the allocators, Secretary Shri Dutt stated that the blocks that have been allocated but are not producing are the country's reserved capacity that cannot be utilized. He clarified that India's future growth in coal production will come from bringing already allocated blocks into production, in addition to allocating new blocks.

Talking about the challenges of the last eight months, Shri Dutt stated that when LNG and LPG supplies were disrupted from the end of February due to the West Asian conflict, the government could assure stable electricity to the country only because of the coal stock available in mines and power plants. He thanked the industry for this, but warned that the pressure has not yet eased. According to the International Energy Agency report, the gas market is likely to remain tight until 2027. In the second quarter, the average Asian spot LNG was US$17.5 per MBtu, which was 45% higher than a year ago. Global coal demand in 2026 is estimated to be 8.94 billion tonnes. According to the Secretary, every tonne produced in the country protects the economy from this fluctuation.

Domestic demand for coal in India is also set to increase. According to NITI Aayog projections, coal demand, which is around 1.25 billion tonnes in 2025 under current policies, could exceed 2.6 billion tonnes by 2050. Even on the net-zero path, this demand is likely to remain above 1.8 billion tonnes, as the three major user sectors—steel, cement, and power—will expand multi-fold. In the financial year 2025-26, India produced 1,041 million tonnes of coal, and coal still accounts for more than 70% of the country's electricity supply.

Information about the reforms undertaken so far was given by Smt. Rupinder Brar. Under the 2020 framework, restrictions on end-use were removed, bidding was moved to a revenue-share model linked to the National Coal Index, technical and financial eligibility conditions were removed, and 100% FDI was permitted through the automatic route. Specifically for underground mines, decisions were taken to waive advance payment amounts, provide a lower floor price, and lower performance security. According to a Business Standard report, the purpose of this waiver is to promote underground mining in partially explored coal blocks.

Due to the reforms, operational timelines have also been reduced. The mandated operational time for fully explored blocks has been reduced from 51 months to 40 months, while for partially explored blocks, it has been reduced from 66 months to 52 months. The average time for mining plan approval has dropped from 9 months to 4.5 months. Mine opening permissions are now granted by the company's board, and 44 recognized exploration agencies no longer require a prospecting license.

Smt. Brar emphasized the balance of development with environmental protection and community welfare. She stated that transparency, policy stability, and ease of doing business are key factors to attract investment and increase competitiveness. The ministry urged allocators to open mines ahead of due timelines, reach peak capacity faster, and raise land, forest, and state-level issues early.

Talking about responsible mining, Secretary Shri Dutt said that mining takes land, uses water, and changes livelihoods. Families who give land should know from day one what they will get, where they will go, and how their income will be restored. Companies must honor every commitment made. The ministry also sought suggestions on policy changes, clauses of coal mine agreements, and amendments to laws or rules.

During the consultation, there was an in-depth discussion on future mining, which included topics such as underground coal gasification, adoption of technology to increase efficiency, and bringing innovation. Furthermore, focus was also laid on rehabilitation, resettlement, land reuse, worker welfare, and inclusive growth through CSR. In the field of technology, the industry presented advancements like AI, robotics and digital transformation, reducing ash content in coal in mines, modern exploration techniques, and paste filling.

Officials from DGH, DGMS, MoEF&CC, and CGWA spoke about the CBM framework, mine safety, environmental policy reforms, and groundwater clearance. Experiences on mine closure processes, CSR, community welfare, afforestation, and increasing coking coal production were also shared in the sessions. Through this consultation, the ministry has attempted to prepare a roadmap for a modern, responsible, and self-reliant coal sector. The ministry will analyze the received suggestions and take them forward with relevant stakeholders.