Coal Ministry Slashes Costs to Boost Underground Mining

The key highlight is the reduction in floor revenue share for underground coal mines from 4% to 2%, offering significant fiscal relief to prospective developers. In a further boost, the mandatory upfront payment requirement for underground coal mining ventures has been completely waived, removing a major financial hurdle for investors.

Together with the existing 50% rebate on performance security for underground coal blocks, these incentives form a compelling package that is expected to attract robust private sector participation and fast-track project implementation.

“These reforms reaffirm our commitment to building a future-ready, investor-friendly and environmentally-conscious coal sector,” said a senior official from the Ministry. “By lowering entry barriers and encouraging adoption of cutting-edge technologies, we aim to make underground mining more viable and sustainable.”

Unlike opencast mining, underground mining is less disruptive to the surface environment, making it a greener alternative. The Ministry hopes the reforms will drive the adoption of technologies such as longwall systems, continuous miners, remote sensing, and AI-based safety tools, enhancing both productivity and workplace safety.

The policy shift is also aligned with India’s Atmanirbhar Bharat vision, aiming to unlock untapped reserves, reduce import dependency, and improve the country’s energy security.

The reforms are expected to catalyze investments worth several billion rupees in coming years, transforming India’s coal mining landscape into one that balances economic growth with ecological responsibility.