Coal exchange to be launched soon, says coal and mines minister

India’s first coal exchange will be launched soon, Union minister for coal and mines G. Kishan Reddy has said.

“We are in the process. Regarding coal exchange, we are discussing. Already last week we have taken a meeting. In a little time, we will come up with it,” he said in New Delhi on the sidelines of a stakeholder consultation on mine developers and operators and star rating for mines on Monday.

Reddy said the exchange will help in providing a larger market for the commodity and in creating a transparent benchmark price for it.

200 million tonnes of coal to be traded annually

In August, Mint reported that the Centre is mulling the creation of a new, independent regulator for the exchange.

An independent regulator with sectoral expertise would be key to providing fairness and transparency to the operations of the exchange, especially after the market was opened in 2020 to private players to take up commercial mining.

Commercial players are expected to be key suppliers on the exchange along with state-run miner Coal India Ltd.

A draft cabinet note has already been circulated for interministerial consultations. However, the cabinet note has not yet been finalised and sent to the cabinet committee on economic affairs (CCEA), given ongoing deliberations over the requirement of a new regulator.

The coal exchange will be a platform for buyers and sellers of the mineral wherein buyers will have options in terms of the grade of coal and location.

A substantial part of the surplus coal of Coal India and its subsidiaries, after long-term linkage commitments are met, is likely to be traded on the exchange, which may come to around 200 million tonnes annually.

Boom in production but fall in demand

The plan for a coal exchange comes against the backdrop of unprecedented growth in India’s coal production but slackening demand.

In the previous fiscal year, India’s coal production touched a new high of 997.4 million tonnes, marking an 11.67% increase from FY23. For this year (FY25), the Centre has set a target of 1.08 billion tonnes.

Coal India alone produced 773.6 million tonnes of coal in FY24, 10% higher than FY23.

In another major development, the ministry of coal on Monday opened bids for the 10th round and second attempt of the ninth and eighth rounds of commercial coal mines auction. Out of the 61 coal mines offered in the 10th round, 43 bids have been received for 16 coal mines.

New secretary for Coal Ministry

Vikram Dev Dutt, a senior civil servant, on Monday assumed charge as secretary to the Union Ministry of Coal.

A 1993-batch Indian Administrative Service (IAS) officer of the Arunachal Pradesh-Goa-Mizoram and Union Territory (AGMUT) cadre, Dutt was till recently the director general of the Directorate General of Civil Aviation (DGCA).

Dutt takes charge at a crucial time as the government is looking at increasing India’s coal production and reduce import dependence.

(By arrangement with livemint.com)