- Govt invites comments from stakeholders by 6 Apr’25
- Coal Controller Organisation to be overseeing body
India’s Ministry of Coal has released a consultation paper proposing the establishment of a Coal Trading Exchange (CTE), inviting comments from stakeholders by 6 April 2025.
Amid projections that India’s coal production will reach 1 billion tonnes (bnt) by FY’25 and exceed 1.5 bnt by 2030, the government seeks to implement policy reforms to enhance domestic availability and competitive pricing. Currently, coal sales are dominated by Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL), and private miners have limited options to sell surplus coal. This shift towards a surplus coal scenario has called for significant changes in coal sales mechanisms, leading to the introduction of a CTE.
Launch of CTE to boost trade efficiency
The CTE will establish a ‘many-to-many’ platform, enabling both government and private sector coal producers to trade coal efficiently. This platform will replace the current ‘one-to-many’ model, facilitating better price discovery through simultaneous bids from buyers and sellers. Additionally, the exchange will implement clearing and settlement systems to ensure secure transactions.
Coal Controller Organisation to have regulatory oversight
To regulate the CTE, the Ministry of Coal has proposed empowering the Coal Controller Organisation (CCO) as the overseeing body. Legislative amendments to the Mines and Minerals (Development & Regulation) Act, 1957, will define CTE and grant the CCO authority to establish rules for coal trading and market regulation.
Role of exchange operators
Exchange operators will need authorisation from the CCO to establish and operate the CTE. They will be responsible for setting up the exchange and issuing market rules, under the strict oversight of the CCO.
Conclusion
The CTE could emerge as a pivotal reform to transform India’s coal sales market, promoting efficiency, competitiveness, and transparency. Stakeholders are invited to submit their feedback by 6 April 2025.
Article From bigmint
