The government will not conduct any auctions for commercial coal mining until the elections. The move follows sustained pressure from Coal India unions that have threatened to go on strike.

“Coal India unions have twice threatened to go on strike whenever the Centre makes any progress towards conducting auctions for commercial coal mining. The timing of the strike calls coincides with spells of coal shortages driven by higher demand. If the strikes go through then we may have to shut down some power plants,” an official, aware of the government decision, told BusinessLine . “The legislative approvals have been taken and the list mines for commercial mines was also close to finalisation,” the official said.

The unions had threatened a strike in February, then again in September. They have called for another strike sometime this month, the official added.

In February 2018, the Union Cabinet had approved the methodology for auction of coal mines for sale of coal under the Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957

Coal sector reform

“Opening up of commercial coal mining for the private sector is the most ambitious coal sector reform since the nationalisation of this sector in 1973,” a Coal Ministry statement had said. The enabling provision to allow commercial mining was approved in January 2016.

“This reform is expected to bring efficiency into the coal sector by moving from an era of monopoly to competition. It will increase competitiveness and allow the use of best possible technology in the sector. Higher investment will create direct and indirect employment in coal bearing areas, especially in the mining sector, and will have an impact on economic development of these regions,” the statement said.

Sources say the pressure from Coal India unions has spooked the Centre that does not want to attempt any non-populist measures in an election year.

“Coal India union leaders were called by the Opposition parties who had attempted to politicise the issue by claiming that Coal India’s monopoly will be threatened when commercial coal mining begins,” another official said.