In a major move to reform the domestic coal market, the Indian government has decided to establish dedicated coal exchanges. This initiative aims to create a competitive marketplace for selling surplus thermal coal, anticipating record production levels in the coming years.
Regulatory Framework and Draft Rules Finalized
The Centre has appointed the Coal Controller Organisation (CCO) as the official authority to register and regulate these proposed trading bodies. A formal gazette notification confirming the CCO's new role was issued earlier this month, granting it significant oversight powers.
The Ministry of Coal has already prepared the revised draft of the Coal Exchange Rules and is currently seeking feedback from stakeholders. These exchanges will facilitate the trading of coal as a commodity, with prospective operators requiring authorisation from the CCO to function.
Driving Forces: Surplus Production and Rising Demand
This structural shift is driven by India's remarkable growth in coal output. Officials confirmed that coal production breached the 1-billion-tonne mark in the 2024-25 financial year. Projections indicate this figure is likely to grow beyond 1.5 billion tonnes by 2030.
Concurrently, a recent International Energy Agency (IEA) report forecasts that the country's overall coal demand will rise by 17% over the next five years. The combination of increased availability and sustained demand is expected to create a paradigm shift towards a surplus scenario, necessitating modern market mechanisms.
Powers of the Regulator and Legal Backing
The CCO will wield considerable authority in this new ecosystem. Its responsibilities will include:
- Registering exchanges and revoking registrations if necessary.
- Notifying fees and charges for exchange operations.
- Conducting ongoing market oversight and monitoring activities.
- Issuing guidelines for dispute and grievance redressal.
This move is empowered by the Mines and Minerals (Development and Regulation) Amendment Act, 2025. The Act, passed by Parliament earlier this year, allows the central government to promote market development, including mineral trading via exchanges, by framing specific rules and appointing a regulatory authority.
Officials attribute this potential surplus to several policy reforms in the coal sector, which have enhanced self-sufficiency and availability nationwide. The establishment of coal exchanges is seen as the next logical step in evolving India's energy market infrastructure to handle future supply dynamics efficiently.
