Numerous incentives likely to be available for underground coal mining

03 May 2023 CW Team

The government is contemplating a number of options, including exempting fuel produced from underground mines from the notified price regime, in an effort to boost environmentally friendly underground coal mining, which still produces less than 5% of the nation's total coal output.

With land provided on a long-term lease and financial incentives, private operators are also encouraged to reopen Coal India's abandoned coal mines under the condition that they use underground mining technologies.

To give investors a larger return, the whole underground coal production will be placed up for auction.

CIL has placed a few of its abandoned coal mines on a revenue-share scheme. As the land is there and the mine is partially developed, the developer does not have to incur initial capex on them. With significant capital and time savings, the miners may begin production.

The government wants to lower the amount of opencast mining, which is currently over 90%, as these need a lot of land and the clearing of forests and have a greater environmental impact due to the better quality of coal they produce.

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