Coal distribution through e-auction was introduced under the New Coal Distribution Policy of the government with a view to provide access to coal for such consumers who are not able to source coal through the available institutional mechanisms for reasons like seasonality of coal requirement, limited requirement of coal not warranting long term linkage etc. In the long run, it is expected that e-auction may help in creating spot as well as future market of coal in the country.

Thus, the e-auction scheme has been introduced subject to inter alia the following conditions:

• Any buyer will be entitled to buy coal under e-auction.

• There shall not be any ‘Floor Price’ in e-auction. However, coal companies may be allowed to fix an undisclosed Reserve Price not    below the notified price.

• Programme of e-auction should be announced well in advance and be given wide publicity amongst all consumers who
   intend to participate.

• At the beginning of the financial year, CIL shall declare a programme on sale of coal through e-auction indicating the quantity
   and quality of coal to be made available through auction during all the four quarters from different coal companies/ coalfields.

• In order to address the concerns of such industrial consumers who wish to have an assured supply over a long period, say
   one year, under e-auction so as to plan their annual production etc. CIL will earmark a fixed quantity which will be provided
   to highest bidder/ bidders as per bidders’ requirement over the period of the bid.

Based on the above guidelines and modalities, around 10% of estimated annual production of CIL would be initiatially offered under e-auction and quantity to be offered under e-auction would be reviewd from time to time by Ministry of Coal.

In keeping with the Mines and Minerals (Development and Regulation) Act of 1957, Clay along with stones, gravel etc. is considered ‘Minor mineral’ and the various State governments are authorised to make rules with respect to Minor Minerals. The State government has the authority for regulating the grant of mining leases in respect of minor minerals. The holder of a mining lease has to pay a royalty or dead rent, whichever is more in respect of minor minerals removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee at the rate prescribed for the time being in the rules framed by the State government in respect of minor minerals.

The Act also mentions that the State government shall not enhance the rate of royalty or dead rent in respect of any minor mineral more than once during a period of three years