Coal sector to open for commercial mining, likely in FY16: Coal Secretary Anil Swarup

The government is set to take another leap in the coal sector by auctioning blocks for commercial mining likely in the current financial year, according to Coal Secretary Anil Swarup.

The auction of coal blocks for commercial mining is likely to come after consulting sector experts, foreign companies and industry bodies, as reported by The Economic Times.

Currently the companies are allowed mining only for captive use (use in their own plants).

The coal ministry is said to have even already identified the mines which will be auctioned for commercial mining. The opening of the sector will allow selling of coal in the open market that is expected to plug in the shortages into fuel-starved new power projects.

"We are conscious of the fact that if the coal production has to go up in this country to the levels we are talking about we will have to go in for commercial coal mining," Swarup told the English daily.

Though the coal ministry has not set any timeline to begin commercial mining, it is at the same time pondering over allocating coal mines to the states as well for the same.

Coal blocks' auction for private players and allocation to states for commercial mining could come simultaneously or separately, Swarup said. There is no sequence for the two, he added.

The coal ministry is expecting 130 million tonnes of coal output from auctioned captive coal blocks in the next 18 months.