Govt extends upfront payment waiver to partially explored coal blocks
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓The coal ministry extended the upfront payment waiver to partially explored coal blocks.
- ✓This move aims to boost underground mining across the country.
- ✓The ministry said, "In order to further incentivise the adoption of underground mining, the Competent Authority has approved the proposal to extend the benefit of waiver."
Story at a Glance
- Category
- MARKET
- Reported By
- Business Standard
- Reading Speed
- 3 Minute(s)
- Market Focus
- India Economy
In a significant move aimed at boosting underground mining in the country, the coal ministry has extended the benefit of waiver of upfront payment to partially explored coal blocks too. Currently, companies undertaking underground mining in partially explored blocks pay an upfront amount calculated at 0.2 per cent of the value of the estimated geological reserves in the block.
The current methodology for the auction of coal blocks for sale of coal under the Coal Mines (Special Provisions) Act and the MMDR Act prescribes the floor percentage of revenue share at 4 per cent. In addition, the allocatee company is required to deposit a 2 per cent upfront amount. However, in the case of coal mines classified for underground mining, the floor percentage of revenue share is set at 2 per cent, along with a complete waiver of upfront payment.
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