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Government to Take Bigger Revenue Share from Coal Sold in Open Market - Report

Coal News - Published on Mon, 19 Aug 2019

Image Source: ET
ET reported that the government will take a higher revenue share from the portion of coal output that is sold in the open market by winners of coal blocks on offer in the current round of the auction. Winners will be allowed to sell a quarter of the output in the open market without price restrictions. Blocks will be awarded on the basis of the highest share of revenue offered to the government. On top of this share, the government will take another 15% for sales in the open market. The remaining 75% of the output is for captive consumption by winners of 27 blocks being auctioned to private companies from sectors like iron and steel, cement and captive power plants.

However, the government will calculate its share of revenue from a block on the basis of a proposed index to rule out disputes over possible underreporting of revenue by operators. Payments by operators are likely to be made on monthly basis and the government has realised that keeping a tab on the price/revenue may not be feasible on a regular basis.

Among the blocks on offer, 19 are schedule III mines that are ready to produce with almost all clearances and plans in place. One is a schedule II mine, which was producing when it was taken back by the government. These 20 mines are estimated to hold an extractable reserve of 1 billion tonnes. According to mining plans, they can produce a total of 36 million tonnes a year, of which 9 million can be sold in the open market.

Six blocks on offer are schedule I coking coal mines, explored with rough estimates of reserves, they are in various stages of development and will require some time before production can start. Pending milestones for these blocks include mining plans, forest and environmental clearances, mining lease and land acquisition.

Source :

Posted By : Sanju Moirangthem on Mon, 19 Aug 2019
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