Page 53 - Policy Economic Report - April 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

The Singhali underground mine was approved in 1989 for a production capacity of 0.24 million tonnes per
year and commenced operations in 1993. Presently, the mine has 8.45 million tonnes of extractable
reserves of G-7 grade non-coking coal. It was developed using the Bord and Pillar method, employing Load
Haul Dumpers (LHDs) and Universal Drilling Machines (UDMs) for underground operations.

However, the surface area above the mine is densely occupied—with villages, high-tension electricity
lines, and a Public Works Department (PWD) road, rendering traditional caving methods unfeasible due
to safety and environmental concerns.

With a total investment of ?7040 crore, the project is a major initiative to promote green mining
technologies in India. It aims to enhance coal production while significantly reducing environmental
impact.

Speaking on the occasion, SECL CMD Shri Harish Duhan said "I firmly believe that paste fill technology will
not only secure the future of underground mining but also offer an innovative, eco-friendly solution. This
project is a landmark step toward green mining and will shape the future of the coal industry in the years
to come."

India’s Underground Coal Mining Gets a Major Boost with New Incentives by Ministry of Coal

In a decisive step towards revitalizing India's coal sector, the Ministry of Coal introduced a series of
transformative policy measures aimed at promoting underground coal mining. These bold reforms
address the traditional challenges of high capital investment and longer gestation periods, reaffirming the
Government’s resolve to modernize the coal ecosystem while aligning with the broader vision of
sustainable development.

To accelerate the growth/ Operationalization of underground coal mining, the Ministry of Coal has
introduced a robust package of incentives:

1. Reduction in Floor Revenue Share: The floor percentage of revenue share for underground coal
mines has been reduced from 4% to 2%. This targeted reduction offers substantial fiscal relief and
enhances the financial viability of underground projects.

2. Waiver of Upfront Payment: The mandatory upfront payment requirement for underground
mining ventures has been completely waived off. This measure removes a significant financial
barrier, encouraging broader participation from the private sector and facilitating faster project
implementation.

These incentives are further complemented by an existing 50% rebate on performance security for
underground coal blocks, collectively lowering the entry threshold and facilitating smoother project
implementation.

The Ministry’s reform-oriented approach underscores its commitment to fostering a future-ready,
investment-friendly, and innovation-driven coal sector. By incentivizing underground mining, the
Government is not only catalyzing economic growth but also driving the industry toward greater
efficiency, safety, and employment generation.

Underground coal mining is inherently more environment-friendly, as it causes significantly less surface
disruption compared to opencast operations. These policy measures are expected to encourage the

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