Executive Summary:
This document summarizes the benefits of underground coal mining and the government's efforts to promote it. It outlines incentives introduced to encourage underground mining, including amendments to the coal and lignite mine auctioning methodology. The document also presents the share of underground mining in total coal production over the last five years and the government's strategies to increase this share.
Key Points / Main Content:
Benefits of Underground Coal Mining:
* Reduced disturbance to surface features (infrastructure, agriculture, forests, habitation).
* Less dust and noise pollution compared to opencast mining.
* Suitable for extracting deep-seated, higher quality coal reserves.
* Smaller surface footprint, leading to lower indirect greenhouse gas emissions.
* Less susceptible to adverse weather conditions, improving operational safety.
Government Incentives for Underground Coal Mining:
* Amendment to the coal and lignite mines auctioning methodology (order dated 23.04.2025).
* Reduction of the floor percentage of revenue share to 2%.
* Complete waiver of the Upfront Amount for underground mining projects.
* Successful allocatees cannot convert the underground mine into an opencast or mixed mine.
Underground Coal Production Share:
* Share of underground mining in total coal production has decreased over the last five years:
* 2019-20: 5.54%
* 2020-21: 4.50%
* 2021-22: 4.26%
* 2022-23: 3.90%
* 2023-24: 3.44%
* Government and coal companies are taking steps to enhance the percentage share of underground mining by:
* Adoption of Mass Production Technology.
* Embracing Mine Development and Operation (MDO) projects.
* Re-operationalization of abandoned/discontinued underground mines through MDO under revenue sharing mode.
Impact Analysis:
Bidders participating in coal/lignite mine auctions:
* Impact: Benefit from reduced revenue share percentage and waived upfront amount for underground mining projects. Must commit to maintaining the mine as underground.
* Action Required: Evaluate potential underground mining projects based on new incentives.
Coal Companies:
* Impact: Expected to increase underground coal production through technology adoption, MDO projects, and re-operationalization of mines.
* Action Required: Implement Mass Production Technology, participate in MDO projects, and assess feasibility of re-operationalizing abandoned underground mines.
Government:
* Impact: Aims to increase the share of underground coal mining.
* Action Required: Monitor the effectiveness of the implemented policies and incentives.
Key Entities Referenced
Anup Sanjay Dhotre: Member of Lok Sabha who raised the question about underground coal mining.
G. Kishan Reddy: Minister of Coal Mines who provided the answer to the question.
Underground Coal Mining: A method of extracting coal from the earth through subsurface tunnels and shafts, the primary subject of the policy discussion.
Opencast Mining: A surface mining technique for extracting coal, used as a comparison point to underground mining in the document.
Auctioning coal and lignite minesblocks for the sale of coallignite on a revenuesharing basis: The government's method for allocating mining rights and receiving revenue from coal and lignite extraction.
28.05.2020: Date of methodology for auctioning coal and lignite minesblocks for the sale of coallignite on a revenuesharing basis.
23.04.2025: Date of amendment to provide specific incentives for underground mines
Mass Production Technology: A technological approach being adopted by coal companies to enhance underground coal production.
GOVERNMENT OF INDIA
MINISTRY OF COAL
LOK SABHA
UNSTARRED QUESTION NO. 2933
TO BE ANSWERED ON 06.08.2025
Benefits of Underground Coal Mining
2933. Shri Anup Sanjay Dhotre:
Will the Minister of COAL be pleased to state:
(a) the benefits of underground coal mining over open-cast mining in terms of land
use, environmental sustainability and safety of operations;
(b) whether the Government has introduced any new policy measures aimed at
encouraging or promoting underground coal mining in the country;
(c) if so, the details thereof, including incentives offered, policy goals and
implementation strategies; and
(d) the proportion/share of underground mining in the total coal production of the
country during the last five years and the steps taken by the Government to enhance
its share?
ANSWER
MINISTER OF COAL & MINES
(SHRI G. KISHAN REDDY)
(a): Underground coal mining offers several advantages, particularly from
environmental, land-use, and social perspectives. Since underground mining causes
minimal disturbance to surface features, it results in reduced damage to infrastructure,
agricultural land, forests, and habitation areas.
From an environmental standpoint, underground mining generates significantly less
dust and noise pollution compared to opencast mining. It is also well-suited for
extracting deep-seated coal reserves, which are often of higher quality. Moreover,
underground mining leaves a smaller surface footprint, thereby contributing to lower
indirect greenhouse gas emissions associated with land degradation and loss of
vegetation.
Additionally, underground mines are generally less susceptible to adverse weather
conditions such as heavy rains or flooding, which can disrupt surface mining
operations. This makes underground mining relatively safer throughout the year due
to varying climatic conditions.
(b) & (c): Yes, the Government has taken steps to promote underground coal mining.
In this regard, the methodology dated 28.05.2020 for auctioning coal and lignite
mines/blocks for the sale of coal/lignite on a revenue-sharing basis has been amended
vide order dated 23.04.2025 to provide specific incentives for underground mines.
These include:1. Reduction of the floor percentage of revenue share to 2%.
2. Complete waiver of the Upfront Amount.
These incentives apply to bidders participating in the auction of coal or lignite mines
reserved for underground mining. The successful allocates under this category,
availing the above benefits, shall not be permitted to convert the underground mine
into an opencast or mixed mine at any stage during the life of the mine.
(d): The proportion/share of coal production from underground mining in the total coal
production of the country during the last five years is given below:
Year % share of UG production in the total coal
production
2019-20 5.54%
2020-21 4.50%
2021-22 4.26%
2022-23 3.90%
2023-24 3.44%
Further, to enhance percentage share of underground mining, along with steps as
mentioned at Para(b) above, taken by Government, coal companies have undertaken
steps such as adoption of Mass Production Technology, embracing Mine
Development and Operation (MDO) projects and re-operationalization of abandoned/
discontinued underground mines through MDO under revenue sharing mode.
*****