Report by Kamgar Ekta Committee correspondent
Three events in the last few months in the coal sector of the country are indicative of the rapidity with which the step by step privatization is quietly being done in this sector.
In the last week of May 2026, the Government of India sold 2% of its shareholding in the Coal India (CIL). With this sale the government shareholding in CIL has come down to around 61%.
The government launched14th round of the auction of commercial coal blocks in October 2025, offering 41 coal blocks for auction. Since 2020, 14 Rounds of auction of commercial coal/lignite mines have been conducted so far, auctioning 141 coal mines.
In early 2026, Eastern Coalfields Ltd, a subsidiary of CIL, awarded a Rs 2,500 crore Mine Developer and Operator (MDO) contract to a private company, Innovative Mining Projects Private Ltd. (IMPPL) for underground coal mining.
It can be seen that three distinct approaches for privatization of coal sector are being followed.
Firstly, private sector is encouraged and public sector growth throttled by taking away coal blocks from public sector enterprises (PSEs) and auctioning them mostly to private sector companies.
Secondly, public sector coal companies are being made to handover more and more coal blocks for development and operation on long term basis through the MDO model.
Thirdly, the government ownership of public sector coal companies is continuously reduced so that at some time in the future they can be fully privatised.
Privatisation of the coal sector began in in 1993 as a part of the policy of globalisation through liberalisation and privatisation, when private players were permitted to own and operate coal mines for captive use (for their own power, steel, or cement plants). The Coal Mines (Nationalisation) Act, 1973, was amended to allow the above.
The major push towards privatisation was done with the enactment of the Coal Mines (Special Provisions) Act, 2015 which enabled the auction-based allocation of coal mines to private players. Prior to that, the Central government had allocated coal blocks directly to private players, but those allotments had had to be cancelled due to the Supreme Court decision in 2014.
In 2018, the government allowed private players to enter commercial coal mining. They could now mine coal not just for their own use but also for selling to others. This was followed by full liberalisation in 2020 with the Mineral Laws (Amendment) Act, 2020. The Act completely removed the requirement of having previous experience in India for mining, allowing any company to bid for coal blocks.
By March 2026, the government had auctioned 135 coal mines through 13 rounds of auctions. These mines have the potential to produce 325 million tonnes of coal per annum. Private captive and commercial coal mines already account for nearly 20% of annual coal production and dispatch of the country. The coal production from these mines was 210 million tonnes in 2025-26 and their share will keep rising as more and more mines are auctioned to private players.
It is important to note that many of the mines auctioned to private players had been allotted earlier to public sector coal producers – Coal India and Singareni Collieries. So, private players are being encouraged at the cost of public sector coal producers.
A new mode of privatization of coal mining was launched by engaging private Mine Developer-cum-Operators (MDOs) for mines of Coal India Ltd. CIL identified 28 coal mine projects with a combined capacity of ~257 MT for MDO implementation. As of August 2024, 18 mines have been awarded to private parties, marking a significant milestone in this ambitious endeavour. These 25-year contracts cover the entire mining process, from, land acquisition and environmental clearances to excavation and delivery.
While launching the MDO model, the Ministry of Coal claimed, “The primary goal of engaging Mining Developers cum Operators (MDOs) is to significantly increase coal production by streamlining operations, enhancing productivity, and reducing mining costs.” It further claimed that, “By partnering with MDOs known for their advanced technological capabilities, CIL aims to modernize mining practices and improve operational efficiency.”
It is surprising that the world’s largest coal mining company, Coal India, with nearly 50 years of coal mining experience feels that private operators have more ‘advanced technological capabilities’ and can ‘modernize its mining practices and improve its operational efficiency’.
If we look at the private operators who have been awarded MDO contracts, it is clear that the aims of the MDO scheme have been spelt out only to hide the real objective, which is privatisation. Leading private players awarded MDO contracts by CIL and its subsidiaries include Adani Enterprises Ltd, Dilip Buildcon Ltd, Power Mech Projects, Sushee Infra & Mining Ltd, NCC Ltd and KVRR Infrastructure. Most of these companies are primarily infrastructure construction companies with no or limited coal mining experience. They certainly do not have advanced technological capabilities or experience to modernize mining practices. The MDO scheme is nothing but a mode of partial privatization of Coal India.
In October 2010, the Government of India made an Initial Public Offering (IPO) of 10% of the shares of CIL. In January 2015, the Government of India sold a further 10% stake in CIL and the process of selling has continued, as a result of which the government shareholding in CIL has come down to around 61%.
The government has now also started private sector participation in CIL’s subsidiary companies, too. In January 2026, it issued new shares of Bharat Coking Coal India Ltd. of worth of about Rs 1000 crore to the public.
The coal industry was entirely in the private sector till 1973. It is important to recollect the state of the private coal industry then. It was notorious for unscientific mining practices. Coal is a critical natural resource. Coal mining must be carried out so as to maximize the life of the resource. However, capitalists were resorting to mining so as to maximize short term profit.
Fatal accidents were rampant due to unsafe working conditions.
There was no stability in the supply of coal to power plants and other coal based industries.
Coal is a major source of energy in our country. 70-75% of electricity is generated using coal as fuel. Many basic industries like cement and steel heavily depend on it as a fuel.
Monopoly capitalist houses of the country now dominate production of electricity, steel and cement. They want to control and own their key raw material, coal.
Coal is a strategic commodity for the society. Its privatization is not in the interest of the society and people.