The union ministry of coal is aiming to monetize assets worth ₹54,721 crore in FY25, which marks a 9% increase compared to the target set for FY24, amounting to ₹50,118 crore.
In the 11 months leading up to February, the ministry exceeded its FY24 target by monetizing assets worth ₹55,148 crore.
According to a response to a query sent via email, the coal ministry stated, “The projected target with reference to asset monetization plan for FY 24-25 is ₹54,721.06 crore. ₹55,148 crore of asset monetization has been done in FY 2023-24 till February 2024 against NITI Aayog Target of ₹50,118 crore.”
Commercial auction of mines and development of mines through the ‘mining developers and operators’ (MDO) model are anticipated to be the primary routes for asset monetization for the ministry. The ministry engages third-party MDOs, including private players, in coal mines through global tenders.
An informed source highlighted that the target for FY25 is expected to surpass that of FY24. The primary methods of monetization will continue to be auctions and MDOs, with mines of public sector companies being allocated to an MDO for development.
In 2020, the government opened up coal mining for commercial purposes by private players and has auctioned 91 mines thus far. However, private interest in mines has somewhat saturated over the years, with several companies meeting their captive requirements. To make coal mining and the auction process more appealing, the government has introduced various measures, including flexible utilization of coal and reduced upfront payable amounts.
In February, the ministry announced that it received 33 bids for 13 coal mines out of 27 mines put up for auction in the ninth round.
For FY25, the ministry aims for a production of 186.63 million tonnes (mt) from captive and commercial coal mines. Plans are in place to increase production to 225.69 mt during FY26, with a target of 383.56 mt by FY30. Additionally, the ministry has initiated the monetization process for the Dugda Coal Washery of Bharat Coking Coal Ltd (BCCL), and plans to auction more old and non-operational washeries to private steel companies.
The coal ministry has demonstrated success in asset monetization, backed by its commercial mines auctions.
Asset monetization is part of the National Monetization Pipeline prepared by the Niti Aayog. The central government and central public sector enterprises are estimated to monetize assets worth ₹1.50 trillion in FY24, against a targeted ₹1.75 trillion, as reported by the Press Trust of India in February.
