Unlocking Hidden Riches: India’s Underground Coal Mining Gets Fast-Track Boost

In a historic push to spur India's coal industry, the Coal Ministry has announced a comprehensive incentive package to hurry the development of underground coal mines. The fresh policy, disclosed on April 24, 2025, drops the condition of upfront payment for underground mine ventures and cuts the minimum share of revenue down from 4% to 2%, lowering substantially the funding hurdles for the private sector as well as cutting the time frame for project development.

 

Key Highlights:

 

Waiver of Upfront Payment: The government has abolished entirely the upfront payment requirement on underground coal projects, clearing a big obstacle for operators and investors.

 

Reduced Revenue Share: The minimum revenue share of 2% on underground coal mines has been cut from 4%, which provides significant fiscal relief and improves the viability of projects financially.

 

Rebates and Incentives: The reforms complement an already existing 50% performance security rebate on underground coal blocks, further cutting down the entry cost for developers.

 

Technology Push: The incentives are likely to spur the adoption of new-generation mining technologies such as continuous miners, longwall systems, remote sensing, and AI-based safety devices, improving productivity and reducing environmental footprint.

 

Green and Sustainable: Underground mining is less intrusive to the surface and environment than opencast mining, aligning with India's sustainability aspirations and Atmanirbhar Bharat vision.

 

Economic Impact: The steps are aimed at unlocking untapped reserves, creating jobs, driving innovation, and providing long-term energy security.

 

Through these revolutionary reforms, the government is placing underground coal mining at the forefront of India's sustainable industrial growth.

 

Sources: Economic Times Government, PIB, Moneycontrol, AngelOne, The Hans India