New Incentives Could Boost Viability Of Underground Coal Mining In India

(MENAFN- KNN India)
New Delhi, April 24 (KNN) The Ministry of Coal has introduced comprehensive policy reforms designed to stimulate underground coal mining operations across India.

These measures specifically address longstanding challenges in the sector, including high capital requirements and extended project timelines.

The policy reforms include two significant financial incentives to enhance the economic viability of underground mining ventures.

First, the ministry has reduced the floor percentage of revenue share for underground coal mines from 4 percent to 2 percent, providing substantial fiscal relief to operators.

Second, the mandatory upfront payment requirement for underground mining projects has been completely eliminated, removing a critical financial barrier to market entry.

These new incentives complement an existing 50 percent rebate on performance security requirements for underground coal blocks.

Together, these measures create a more accessible investment environment that is expected to accelerate project implementation and broaden private sector participation in the underground mining segment.

By incentivising underground mining, the government aims to enhance operational efficiency, improve safety standards, and generate additional employment opportunities throughout the coal value chain.

Underground coal extraction offers notable environmental advantages compared to opencast mining methods, primarily through reduced surface disruption.

The policy initiatives are designed to encourage the adoption of advanced technological solutions-including continuous miners, longwall systems, remote sensing capabilities, and AI-based safety protocols-that can simultaneously improve productivity and minimise ecological impact.

(KNN Bureau)

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