India to Establish Its First Coal Exchange

India to Establish Its First Coal Exchange

Sub: Eco

Sec: Infra

Overview:

• Union Coal and Mines Minister announced that India’s first coal exchange is set to be established soon.

Key Features and Objectives:

• Online Trading Platform:
  • The coal exchange will be an online trading platform that allows coal to be traded like any other commodity.
  • It will include a clearing and settlement mechanism, ensuring smooth transactions and easy availability of coal in the market.
• Market Liberalization:
  • The introduction of the exchange is part of the Coal Ministry’s action plan for 2024-25 to open up the coal market, making it more transparent and competitive.
  • This initiative is expected to attract more sellers and buyers, improving the efficiency of coal distribution across the country.
• Regulation and Supervision:
  • The Coal Controller Organisation will supervise the operations of the coal exchange, ensuring adherence to regulatory norms.
  • The minister also mentioned that if necessary, India would consider importing coking coal from Russia to meet domestic demand, especially for steel manufacturing.

Implications:

• Enhanced Market Dynamics:
  • The coal exchange is likely to streamline coal trading, reducing reliance on traditional supply chains and improving accessibility for various industries.
  • By introducing a formal market platform, it aims to provide more price transparency and efficient coal procurement.
• Reduced Bottlenecks:
  • With online trading, issues related to supply bottlenecks can be minimized, ensuring that coal reaches buyers across different regions without significant delays.
• Support for Industrial Growth:
  • The exchange can contribute to the growth of industries dependent on coal by providing a steady and reliable supply, crucial for sectors like power generation and steel production.

Coal Controller Organisation

Coal Controller Organisation, Ministry of Coal collects and maintains coal production data of all private and public sector coal mines in the country. The information is collected on monthly basis.

To ensure fair production and commercial transaction, Coal Controller Organisation, a subordinate office under Ministry of Coal, has been entrusted with the following responsibilities:

• Inspection of collieries so as to ensure the correctness of the class, grade or size of coal.
• To issue directives for the purpose of declaration and maintenance of grades of coal of a seam mined in a colliery.
• To act as the appellate authority in case of dispute between consumers and owner arising out of declaration of grade and size of coal.
• To regulate disposal of stock of coal or the expected output of coal in the colliery.
• Quality surveillance with respect to maintenance of grade, loading of coal in wagons/ trucks according to laid down procedures regarding grades and sizes.
• To grant opening / re-opening permission of coal mine, seam or a section of seam or to sub-divide a mine.
• Assessment and collection of excise duty levied on all raw coal raised and dispatched.
• Submission of monthly coal data to different ministries of Central and State Government, national and international organization.

 Directorate General of Mines Safety [DGMS] is the Indian Government Regulatory agency for safety in mines. The mission of the DGMS is to continually improve safety and health standards, practices and performance in the mining industry and upstream petroleum industry by implementing pro-active safety and health strategies, continuous improvement of processes, effective use of resources and commitment and professional behaviour in its personnel.