It is expected to promote transparency and encourage public-private partnerships in the mining sector. The industry is likely to benefit from the mining pact of NLC and Adani Group in Talabira along with Vedanta's winning bid for Radhikapur mine.
Indian coal sector is expected to affiliate all spot auctions for regulated and non-regulated sectors to finalise market-determined uniform price for every grade. As of now, under the category of regulated sector, special auctions are held for the power sector whereas, separate auctions are held for different sectors.
As per a senior official of the Coal Ministry, its recent proposal is designed to remove enigmatic decision making among the subsidiaries of Coal India, as to which mine will allocate coal for which auction category. The Union Cabinet will be approached after inter-ministerial consultations as the ministry has floated a circular and added that coal pricing should be set without any sectoral preferences. Such decisions will not only put an end to the monopoly of some companies in the sector but also promote competition and participation by private entities which will benefit the end user thorough fair pricing.
Till now, the coal sector has undergone significant developed and the production is multiplied with public-private partnerships. State-owned NLC India Limited got into an agreement with the Adani Talabira for the development and operation of its coal block. With the joint efforts of both the entities, this is estimated to generate a revenue of around Rs 12,200 crore. This coal block was allocated to NLC India by the Coal Ministry for development, mining, and captive consumption of the dry fuel for end use power plants. NLC had circulated the tender and in the reverse auction, a subsidiary of Adani Group in Talabira bagged the tender.
Owing to the ever-increasing involvement of private players, the overall coal production, quality and use of technology have enhanced. The Radhikapur West coal mine, encompassing 312 million tonnes of geological reserves, was allotted to Vedanta Ltd which is unleashing the untapped potential of every mine to produce the maximum capacity.
With uniform prices and the entry of private players like the Adani Group in Talabira to Vedanta in Odisha and Hindalco in other states, the use of latest global mining technology will be promoted. The revenues of states are bound to see a substantial jump and gradually revamp the shortcomings of the sector.