The 147 commercial coal mines auctioned across nine states since 2020 are expected to attract around Rs 55,000 crore in capital investment and generate approximately Rs 47,500 crore in annual revenue.
The projects are also expected to create around 4.9 lakh jobs as commercial coal mining expands following the opening of the sector to private participation.
In FY26, allocated commercial coal mines generated Rs 3,090 crore through upfront and premium payments. The revenue framework also includes royalty payments, competitively bid revenue share, contributions to the District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET), and GST.
Commercial Coal Production Rises
Commercial coal mine auctions were launched in June 2020 following changes aimed at opening coal mining to a wider pool of participants. There are no end-use restrictions for coal produced from commercially auctioned blocks, while 100 per cent foreign direct investment is permitted through the automatic route.
So far, 147 coal mines have been auctioned, with 44 new companies securing coal blocks. The auctions have attracted private companies as well as established public-sector coal producers.
Production from commercial coal mines increased from 12.55 million tonnes in FY24 to 23.51 million tonnes in FY25. Captive and commercial coal blocks together produced around 210 million tonnes in FY26.
The allocation system follows an online two-stage bidding process conducted through the MSTC platform. Upfront payments are kept relatively low and can be adjusted against future revenue-sharing obligations.
New Mining Fiscal Framework
The development comes after the Mines and Minerals (Development and Regulation) Amendment Act, 2026 introduced a uniform fiscal framework for the mining sector.
Under the amended framework, states cannot impose fresh taxes on mineral rights and mineral-bearing land except under conditions prescribed by the Centre.
Coal block allocation underwent a major overhaul after the Supreme Court cancelled 204 coal block allocations in 2014. Commercial auctions were subsequently introduced in 2020 as part of efforts to expand domestic production and private participation in the sector.