The Coal Ministry reported that 147 commercial coal blocks sold through auctions across nine states since 2020 are projected to generate approximately 47,500 crore rupees in annual revenue, 55,000 crore rupees in capital investment, and create 490,000 jobs.
The Ministry specified that the total revenue received from the allocated commercial mines, in the form of initial and premium payments, amounted to 3,090 crore rupees in the last fiscal year (2025-26). It was noted that the revenue sharing model, which combines royalties, premiums, the Mineral Districts Fund (DMF), and the National Mineral Exploration Trust (NMET), has nearly tripled state revenues from coal over the past decade.
The Ministry emphasized that each sold block contributes significantly to state revenues through revenue sharing (a competitively determined share of revenue, in addition to royalties), royalties (set by state law), contributions to DMF (which are channeled back to the mining district via the Pradhan Mantri Haanij Kshetra Kalyan Yojana (PMKKKY) scheme), contributions to NMET (funding future exploration), and Goods and Services Tax (GST).
Last month, the government passed amendments to the Mines and Minerals (Development and Regulation) Act, 2026, to establish a unified fiscal framework for the sector. State bodies can no longer impose new taxes on mineral rights and mineral-bearing lands, except under conditions set by the Centre.
The Ministry stated that after the Supreme Court cancelled 204 coal blocks in 2014, the allocation process transitioned to a transparent, rules-based system. Auctions for commercial coal mines were launched by Prime Minister Narendra Modi in June 2020.
The Ministry added that the bidding is conducted online in two stages on the MSTC platform, with application documents deciphered and opened live before participants. There is no end-use restriction, 100% Foreign Direct Investment is permitted through an automatic route, and initial payments remain low and can be adjusted relative to future revenue share, opening opportunities for smaller and newer participants.
It was also pointed out that under the new policy, 147 coal mines have been sold to date, with 44 new companies winning the right to a coal mine. This policy has attracted private players as well as old state-owned coal enterprises, such as subsidiaries of Coal India.
Coal production solely from commercial mines has increased from 12.55 million tonnes in 2023-24 to 23.51 million tonnes in 2024-25. In total, closed and commercial blocks produced about 210 million tonnes of coal in FY 2025-26.