**Policy Summary: Promotion of Underground Coal Mining in India**
This policy addresses the promotion of underground coal mining in India, as outlined in Lok Sabha Unstarred Question No. 1667, answered on July 30, 2025, by the Minister of Coal Mines, Shri G. Kishan Reddy.
The policy highlights the advantages of underground coal mining, emphasizing its reduced environmental impact compared to surface mining. Specifically, underground mining minimizes disturbance to surface features, infrastructure, agricultural land, forests, and habitation areas, leading to lower land reclamation and rehabilitation costs and reduced greenhouse gas emissions related to land degradation. It is also suited for extracting deep-seated, higher-quality coal reserves and offers operational resilience to adverse weather conditions.
To further incentivize underground mining, the Ministry of Coal has amended the methodology for auctioning coal and lignite mines/blocks for sale on a revenue-sharing basis. This amendment, dated April 23, 2025, modifies the order dated May 28, 2020, by introducing the following incentives for bidders:
1. Reduction of the floor percentage of revenue share.
2. Complete waiver of the Upfront Amount.
A critical condition of these incentives is that successful allocatees of coal and lignite mines/blocks classified for underground mining under these modified conditions are strictly prohibited from converting the underground mine to an open-cast or mixed mine at any stage during the mine's operational life.
Key Entities Referenced
Ministry of Coal: The Indian government ministry responsible for coal and lignite.
Lok Sabha: The lower house of the Parliament of India.
Shri Narayan Tatu Rane: Member of Parliament who raised a question about underground coal mining.
Shri Ashok Kumar Rawat: Member of Parliament who raised a question about underground coal mining.
G. Kishan Reddy: The Minister of Coal Mines who provided the answer to the parliamentary question.
Underground Coal Mining: The subject of the parliamentary question and the focus of the policy measures.
Auction of coal and lignite mines: Refers to the process by which the government allocates rights to extract coal and lignite, in this context, specifically for underground mining.
Order dated 23.04.2025: Amendment to the methodology dated 28.05.2020 for auction of coal and lignite mines or blocks for sale of coal and lignite on revenue sharing basis.
GOVERNMENT OF INDIA
MINISTRY OF COAL
LOK SABHA
UNSTARRED QUESTION NO. 1667
TO BE ANSWERED ON 30.07.2025
Underground Coal Mining
†1667. Shri Narayan Tatu Rane:
Shri Ashok Kumar Rawat:
Will the Minister of COAL be pleased to state:
(a) the details of advantages /benefits of underground coal mining;
(b) whether the Government has implemented any new policy/measures recently to
promote underground coal mining; and
(c) if so, the details thereof?
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. This method of mining leads to lower
land reclamation and rehabilitation costs after mining activities cease. Underground
mining leaves comparatively less surface footprint, thereby contributing to lower
indirect greenhouse gas emissions associated with land degradation and loss of
vegetation. It is also well-suited for extracting deep-seated coal reserves, which are
often of higher quality. Underground mine operations are generally less susceptible to
adverse weather conditions, which can disrupt surface mining operations. This makes
underground mining more feasible throughout the year under varying climatic
conditions.
(b) & (c): Yes, In order to give further impetus to Underground mining, the methodology
dated 28.05.2020 for auction of coal and lignite mines or blocks for sale of coal and
lignite on revenue sharing basis has been amended vide order dated 23.04.2025 to
provide the bidders participating in auction with the following incentives:
1. Reduction of the floor percentage of revenue share to 2%.
2. Complete waiver of the Upfront Amount.
The successful allocatee of coal and lignite mines or blocks, classified for
underground mining on the aforementioned modified conditions of reduced floor
percentage of revenue sharing and complete waiver of upfront amount, shall not be
allowed to convert the Under-Ground Mine to Open Cast or Mixed Mine at any
stage during the life of the mine.
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