The ministry’s reform-oriented approach is aimed at creating an investment-friendly and innovation-driven coal sector.
The ministry has reduced the floor revenue share for underground coal projects from 4% to 2%, easing financial burdens and enhancing project viability. Additionally, the requirement for upfront payments has been eliminated, lowering barriers to entry and fostering private sector involvement. A 50% rebate on performance security for underground coal blocks further supports these efforts, streamlining project implementation.
The Ministry of Coal stated: “The Ministry’s reform-oriented approach underscores its commitment to fostering a future-ready, investment-friendly and innovation-driven coal sector. By incentivising underground mining, the Government is not only catalysing economic growth but also driving the industry toward greater efficiency, safety and employment generation. Underground coal mining is inherently more environment-friendly, as it causes significantly less surface disruption compared to opencast operations.”
The policy encourages the adoption of advanced technologies, including continuous miners, longwall systems, remote sensing tools, and AI-based safety mechanisms. These innovations are expected to improve productivity while minimizing environmental impact, aligning with India’s goals for energy security and sustainability.
The incentives reflect a shift toward cleaner coal extraction methods, aiming to reduce carbon emissions and support economic development. By promoting underground mining, the ministry seeks to enhance efficiency, create jobs, and strengthen the coal industry’s contribution to India’s energy needs.
In a separate development, NMDC, an Indian mining company, is exploring coking coal assets in Indonesia and Australia, according to Reuters. Chairman Amitava Mukherjee noted: “Explorations are at various negotiation stages.” India, a major crude steel producer, relies on imports for 85% of its coking coal, with Australia as the primary supplier.
These initiatives highlight India’s efforts to modernize its coal sector, balance economic growth with environmental considerations, and secure resources to meet industrial demands.
