Coal Trade Exchange: Ministry of Coal to extend deadline until May 7 for comments on draft rules

"The Ministry of Coal had published the proposed draft legislation on Coal Trade Exchange for public consultation... Ministry of Coal has decided to extend the last date for submission of comments/suggestions from April 6, 2025, till May 7, 2025," the coal ministry said

New Delhi: The government has extended the deadline to early next month for public comments on the proposed rules on Coal Trade Exchange that will facilitate the dry-fuel’s trading as a commodity.

“The Ministry of Coal had published the proposed draft legislation on Coal Trade Exchange for public consultation… Ministry of Coal has decided to extend the last date for submission of comments/suggestions from April 6, 2025, till May 7, 2025,” the coal ministry said on its website. The coal ministry has proposed to empower the Coal Controller Organisation (CCO) as the regulator for the proposed trade exchange.

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At present the coal sales channels in the country are specific to the government-owned coal companies, including Coal India Ltd. A need is therefore felt to provide a platform, i.e., Coal Trading Exchange (CTE), to also allow commercial, captive miners a ready access to market their produce, the ministry said, adding that the public sector coal companies may also use this platform. The exchange will facilitate the trading of coal as a commodity.

The CTE is envisaged to lead to a ‘many-to-many’ platform where both buyers and sellers can bid simultaneously, thereby making price discovery of coal more efficient and competitive. Thus, the Coal Trading Exchange would lead to a paradigm shift by transforming the coal sales model in the country from a ‘One-to-Many’ model to a ‘Many-to-Many’ model. Besides, it is envisaged that the CTE will provide for clearing and settlement systems where the Exchange shall act as a counterparty. The different commodity exchanges operating within India or internationally are being regulated by a regulator. The Ministry of Coal has also proposed to empower the CCO as the regulator for the CTE to be set up in the country.

The ministry further explained that India’s coal output is likely to grow beyond 1.5 billion tonnes (BT) by 2030. With the increased availability of domestic coal in the country, it is envisaged that there would be a paradigm shift towards a surplus coal scenario and as a result the coal sales scenario is expected to undergo a major change from the existing mechanisms of coal sales channels, necessitating a major market reform backed by a regulatory mechanism.

Therefore, in the scenario of increased availability of domestic coal in the country, there is a necessity to introduce further reforms in the coal sector with a focus on promoting competitive markets for sale of coal. The government had earlier said that it is optimistic about coal exchange in 2025 and the details are being worked out.