New Delhi: The government on Wednesday approved a methodology for commercial mining of coal on revenue sharing basis. The decision was taken during the meeting of the Cabinet Committee on Economic Affairs (CCEA) under the chairmanship of Prime Minister Narendra Modi. The CCEA “has approved the methodology for auction of coal and lignite mines/blocks for sale of coal/lignite on revenue sharing basis and increasing the tenure of coking coal linkage”, an official release said.
Finance Minister Nirmala Sitharaman while announcing financial package last week said that coal mines would be auctioned to the private sector for commercial mining to end reliance on imports and improve local production. The methodology approved by the CCEA provides that bid parameter will be revenue share, it said adding that bidders would be required to bid for a percentage share of revenue payable to the government.
“The floor price shall be four per cent of the revenue share. Bids would be accepted in multiples of 0.5 per cent of the revenue share till the percentage of revenue share is up to 10 per cent and thereafter bids would be accepted in multiples of 0.25 per cent of the revenue share,” the coal ministry said in the release. There shall be no restriction on the sale and/or utilisation of coal from the coal mine.