Coal Industry

Coal industry

Indian coal reserves are the third largest in the world, after the United States and China.

India is the second largest consumer of coal and coal has hitherto played a crucial role in India’s energy sector, accounting for 55% of the country’s energy needs and over 75% of its electricity needs.

In addition, coal is also a vital ingredient and energy source in production of many important material/ products viz. Steel, Cement, Fertilizer, Paper etc. With significant availability of indigenous coal reserves and

its affordability, coal is likely to continue as the primary source of energy for a considerable period of time to meet the developmental needs of the rising economy.

Although in line with NDC goals and commitments made in its Panchamrit declaration at COP 26, India will push for renewable/non-fossil-based energy, but the share of coal in the energy basket is going to remain significant in the foreseeable future.

As per one of the assessments of NITI Aayog, although there may be a 10% drop in share of Coal in Primary energy supply in 2035 (BAU) but quantum of coal demand may rise 1.40 times due to increased energy demand driven by the rising economy.

The IEA also estimates that the share of coal in the overall energy mix steadily declines to 34% in 2040; however, overall demand for coal still remains stronger to meet the rising energy demand of the rapidly developing economy.

The Mines and Minerals (Development and Regulation) Act, 2015

The Act replaces the Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015 introduces highly anticipated mining reforms and amends the 1957 Mining and Minerals (Development and Regulation) Act Background to the Act long-standing and overdue on the change of mines and minerals (development and regulation) from 2011.

Key Changes

The goal of the 2015 MMDR Amendment Act was to make a straightforward and non-discretionary system for the conceding of mineral concessions and to cure the decline in mining creation. Some of the major amendments introduced by the MMDR Amendment Act 2015 were as follows

• Maximum area for mining: Under the Act, a person could acquire one mining lease for a maximum area of 10 sq. km. The central government may, however, allow the person to obtain one or more licences or leases covering additional areas in order to develop any mineral. The amended provision to allow the central government to increase the area limits for mining, instead of providing additional leases.

• Deemed extension of mining leases: The lease period for all metallic and non-metallic minerals, such as, iron-ore, lead, manganese ore, zinc, lead, gold etc. were extended to a period of 50 years. On expiry of the leases, the lease won’t be renewed, rather the concessions will be set available to be purchased.

• Prospecting license-cum-mining lease: new concept of prospecting licences-cum-mining leases was introduced for certain notified minerals (such as,

bauxite, iron ore, limestone, manganese ore) in areas where there is scarce proof to show presence of mineral substance through the system of serious offering.

• Protection of the rights of existing concession holders and applicants under Section 10A of the MMDR Act.

• Allocation mechanism: The grant of mining leases in respect of certain notified minerals would be done through auction by competitive bidding; further all provisions with respect to the process of allocation of mines through auction by competitive bidding were streamlined.

• Grant of mining leases: The requirement of prior Central Government approval for grant of mineral concession for all the minerals specified in the First Schedule was removed for all mineral concessions.

• Transferability of leases: mineral concessions (prospecting license-cum-mining lease or mining lease) in respect of minerals other than coal, lignite and the atomic minerals, granted through auction were made transferable, subject to prior State Government consent and defiance with prescribed process. Significantly, the concept of approved approval was introduced if the state government did not submit its approval within 90 days of receiving the request.

• Institutions: The act arranges for the formation of a District Mineral Foundation (DMF) and a National Mineral Exploration Trust (NMET). The state government will set up the DMF to improve people’s lives in areas affected by mining. The NMET is set up by the central government for regional and detailed mine exploration. Lease holders and licensees are required to pay the NMET two percent of the royalty and the DMF no more than one-third of the royalty set forth by the central government.

The MMDR Amendment Act, 2025

The MMDR Amendment Act, 2025 was effective from 1st September 2025. The objective is to enhance the supply of the critical minerals by increasing the efficiency of exploration and production. It will reduce the dependency from other countries mainly China which is sensitive and vulnerable to the security of India promote the mining of minerals in India which helps in smooth supply chain.

Provisions of the 2025 amendment include:

Inclusion of Associated Minerals: Leaseholders can now apply to add other minerals to their existing mining leases without extra royalty for certain strategic and deep-seated minerals like lithium, cobalt, nickel, and gold.

Removal of Sale Limits: Captive mines are no longer restricted to selling only 50% of their annual mineral

production in the open market after fulfilling their own plant requirements.

• Lease Extension for Deep-Seated Minerals: The Act allows a one-time area extension for contiguous land: up to 10% for mining leases and 30% for composite licenses focused on minerals found deeper than 200 meters.

• National Mineral Exploration and Development Trust (NMEDT): The former NMET was expanded to fund mine development and overseas exploration. The mandatory lessee contribution was raised from 2% to 3% of royalty.

• Mineral Exchanges: The Central Government is empowered to establish registered electronic marketplaces and trading platforms to determine transparent, supply-demand-based prices for minerals and metals.

National Critical Mineral Mission (NCMM) 2025

India's National Critical Mineral Mission (NCMM) is a comprehensive framework launched to achieve self- reliance in the critical mineral sector. Backed by an outlay of Rs 34,300 crore, it aims to secure resilient supply chains for high-tech industries, clean energy, and national defense by boosting domestic exploration, overseas acquisitions, and recycling.

The objective is to carried out 1200 exploration by the Geological Survey of India (GSI) to make India self- reliance in Critical Mineral by 2030-31.

Core Objectives & Targets:

• Domestic Exploration: The Geological Survey of India (GSI) is conducting 1,200 exploration projects (2024–2031) to ensure the domestic production of at least 15 critical minerals (such as lithium, graphite, and rare earth elements).

• Overseas Acquisitions: Indian companies and PSUs are tasked with securing strategic mining assets worldwide through entities like Khanij Bidesh India Limited (KABIL).

• Fast-Track Approvals: The framework is supported by the Mines and Minerals Development and Regulation Act (MMDR), granting the central government exclusive power to auction key critical minerals with expedited environmental clearances