India’s first commercial coal mine auctions are currently underway, with the highest number of bids placed by the Adani Group. The Gujarat-based infrastructure conglomerate led by Gautam Adani bid for as many as 12 of the 19 mines that go under the hammer. Next are the Aditya Birla Group and JMS Mining with five bids each, followed by four bids from the Naveen Jindal Group.

With these auctions, India is opening up commercial coal mining to the private sector after five decades. The sector was nationalised in the 1970s. A policy change in the 1990s allowed select Indian private sector steel, cement and thermal companies to mine coal for use in their industrial units. But the mine allotments were cancelled by the Supreme Court in 2014 on grounds that they were made arbitrarily.

In 2015, India introduced competitive auctions for coal mines, but the end-use restrictions remained: winners could only use the coal in their industrial units. This year, the government amended the law to remove these restrictions and allow commercial coal mining – that is, auction winners will now be able to mine and sell coal both domestically and globally, without any restrictions.

Unveiling the auctions in June, Prime Minister Narendra Modi described them as...

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