Page 71 - Policy & Economic Report - July 2025
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July 2026 POLICY AND ECONOMIC
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17. Ministry of Coal Notifies Acceptance of Insurance Surety Bonds for MMDR Coal Blocks
The Ministry of Coal has introduced a key reform to provide greater financial flexibility to coal block
allocates and further strengthen ease of doing business in the coal sector. Through the Coal Blocks
Allocation (Amendment) Rules, 2026, the Ministry has enabled the use of Insurance Surety Bonds
(ISBs) in place of Performance Bank Guarantees (PBGs) for coal blocks allocated under the Mines and
Minerals (Development and Regulation) Act, 1957.
The amended framework allows coal block allocates to choose between a Performance Bank
Guarantee and an Insurance Surety Bond for fulfilling their performance security obligations. It also
extends this flexibility to existing allocates, enabling them to replace Performance Bank Guarantees
already furnished with Insurance Surety Bonds, in accordance with the prescribed conditions.
The measure is expected to ease the financial burden associated with conventional bank guarantee
arrangements and enable coal block allocates to deploy their capital more efficiently for mine
development and operational activities. It will also help improve access to financial instruments while
ensuring that the Government’s interests remain fully protected through appropriate performance
security mechanisms.
The facility of Insurance Surety Bonds will be introduced initially for coal blocks allocated under the
MMDR Act. The Ministry will also process for extending the provision to coal blocks allocated under
the Coal Mines (Special Provisions) Act, 2015. This initiative reflects the Ministry of Coal’s continued
focus on regulatory reforms that encourage investment, support the timely operationalisation of coal
blocks and create a more transparent, efficient and investor-friendly ecosystem for commercial coal
mining in the country.
18. Monthly Production and Dispatch from Captive and Commercial Mines in June 2026
India’s captive and commercial coal mining sector continued its growth momentum in June 2026,
recording higher production and dispatch during the month.
Coal production from captive and commercial mines stood at 17.88 Million Tonnes (MT) in June 2026
of FY 2026–27, while coal dispatch reached 18.55 MT. Production increased by 14.9% over June 2025,
when output stood at 15.56 MT.
During the first quarter of FY 2026–27, from April to June 2026, cumulative coal production increased
by 5.35% compared with the corresponding period of the previous financial year. Coal dispatch during
the quarter also recorded a year-on-year increase of 1.70%.
The performance reflects continued improvements in mine operations, capacity utilization and
production planning. The accompanying graph depicts the trend in coal production and dispatch in
Million Tonnes.
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