New Delhi: The Government of India has auctioned 147 commercial coal blocks across nine states since 2020, with the Coal Ministry projecting that these mines could generate around ₹47,500 crore in annual revenue, ₹55,000 crore in capital investment and 4.9 lakh jobs.
The Ministry said the commercial coal auction regime has brought a major transformation in coal block allocation, with the process designed around transparency, competitive bidding and wider participation from private players and public sector undertakings.
In the financial year 2025-26 (FY26), the total revenue generated from allocated commercial mines through upfront payments and premium payments stood at around ₹3,090 crore, according to the Ministry.
147 Commercial Coal Blocks Auctioned Since 2020
Commercial coal mine auctions were launched by Prime Minister Narendra Modi in June 2020, marking a shift towards a more open and competitive coal allocation system.
According to the Coal Ministry:
- 147 commercial coal mines have been auctioned so far.
- The blocks are spread across nine states.
- 44 new companies have won coal mines.
- The auctions have attracted both private companies and legacy coal PSUs.
- There is no end-use restriction for coal from commercial mines.
The government expects the auctioned blocks to make a significant contribution to coal production, investment, employment and state revenues.
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Coal Auctions Projected to Generate ₹47,500 Crore Annual Revenue
The government expects the auctioned commercial coal blocks to generate around ₹47,500 crore in annual revenue.
The Ministry has also projected:
- ₹55,000 crore in capital investment.
- Around 4.9 lakh jobs.
- Higher coal production from commercial mining.
- Increased revenue for coal-producing states.
The revenue-sharing mechanism includes multiple components that contribute to state and national development.
These include:
- Competitively bid revenue share.
- Statutory royalty payable to states.
- District Mineral Foundation (DMF) contributions.
- National Mineral Exploration Trust (NMET) contributions.
- Goods and Services Tax (GST).
The Ministry said the combined revenue-sharing structure has helped nearly triple states’ coal revenue over the past decade.
Commercial Mines Generated ₹3,090 Crore in FY26
The Coal Ministry said the total revenue generated from allocated commercial mines in FY26 stood at approximately ₹3,090 crore.
This figure includes revenue received through upfront payments and premium payments from the allocated commercial mines.
The government expects revenues to increase as more auctioned blocks become operational and their coal production expands.
Transparent Online Auction Process Through MSTC
The Coal Ministry said the auction system has been designed to ensure complete transparency.
Bidding is conducted online in two stages through the MSTC platform. Bid documents are decrypted and opened live in the presence of participating bidders.
The government has highlighted several features of the commercial coal auction framework:
- Two-stage online bidding.
- Live opening of bid documents in front of bidders.
- No end-use restriction on commercially mined coal.
- 100% Foreign Direct Investment (FDI) permitted through the automatic route.
- Low upfront payments that can be adjusted against future revenue share.
- Wider opportunities for smaller and new players.
The framework is aimed at increasing competition and encouraging more companies to participate in India’s coal sector.
Coal Block Allocation Shifted to Rules-Based System
The Ministry said coal block allocation underwent a major transformation following the Supreme Court’s cancellation of 204 coal blocks in 2014.
Subsequently, the government moved towards a transparent and rules-based allocation process.
The launch of commercial coal mine auctions in 2020 further opened the sector to private participation and introduced a competitive bidding mechanism for commercial mining.
44 New Companies Win Coal Mines
The new auction policy has also expanded the pool of companies participating in coal mining.
According to the Ministry, 44 new companies have won coal mines through the commercial auction process.
The policy has attracted:
- New private sector companies.
- Established private players.
- Legacy coal public sector undertakings.
- Subsidiaries of Coal India.
The government believes wider participation can help increase investment, technology adoption and coal production.
Commercial Coal Production Nearly Doubles in FY25
Coal production from commercial mines has recorded a significant increase in recent years.
Production from commercial mines rose from:
- 12.55 million tonnes (MT) in FY24
- To 23.51 MT in FY25
This represents a substantial increase in output within one year.
The Ministry further said that captive and commercial coal blocks together produced around 210 MT of coal in FY26, highlighting the growing contribution of these mines to India’s overall coal production.
New Mining Framework Seeks Uniform Fiscal Structure
The government recently enacted the Mines and Minerals (Development and Regulation) Amendment Act, 2026, aimed at establishing a uniform fiscal framework for the mining sector.
Under the new framework, state governments cannot impose fresh taxes on mineral rights and mineral-bearing lands, except under conditions prescribed by the Central Government.
The move is intended to provide greater consistency in the fiscal framework governing mineral resources.
Coal Auctions Strengthen State Revenue and Mining Ecosystem
The Coal Ministry said every auctioned block contributes to state revenues through multiple channels.
The revenue generated through coal mining supports various areas, including:
- State government revenues through royalty and revenue share.
- Development of mining districts through DMF contributions.
- Future mineral exploration through NMET.
- Government revenues through GST.
- Investment and employment generation in coal-producing regions.
The government expects the expanding commercial coal mining ecosystem to strengthen domestic coal availability while creating new economic opportunities.
About Coal India
Coal India Limited (CIL) is a Maharatna public sector undertaking under the Ministry of Coal and the world’s largest coal-producing company. It operates through multiple coal-producing subsidiaries across India and supplies coal primarily to the power, steel, cement and other core sectors. Coal India plays a major role in meeting India’s domestic energy requirements and strengthening the country’s coal supply chain.
