Government waives upfront payment, offers rebates instead to expedite underground coal mining

Government introduces new incentives to promote underground coal mining, including waiving upfront payment and reducing revenue share

In a bid to speed up the operationalisation of underground coal blocks, the government on Thursday (April 24, 2025) announced new incentives like waiving off of the upfront payment.

The push for underground coal mining aligns with the country's drive for sustainable coal production.

"In a decisive step towards revitalising India's coal sector, the Ministry of Coal has introduced a series of transformative policy measures aimed at promoting underground coal mining," an official statement said.

These reforms address the challenges of high capital investment and longer gestation period.

"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," the statement said.

The mandatory upfront payment requirement for underground mining ventures has been completely waived. This measure removes a 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.