Urtan Coal Mine: India's First Underground Commercial Coal Mine and the Dhirauli Mine

Urtan and Dhirauli Coal Mines: First Underground Commercial Mine Begins

Urtan and Dhirauli Coal Mines Start Production in Madhya Pradesh

Two coal mines in Madhya Pradesh began production in May 2026. The Urtan coal mine in Anuppur district, allocated to JMS Mining Private Limited, began on 15 May 2026 and became the first underground coal mine to start production under the commercial coal auction regime. The Dhirauli coal mine in Singrauli district, allocated to Mahan Energen Limited, began on 17 May 2026 and adds supply from the resource-rich Singrauli region.

The extra output is meant to help meet rising domestic demand and reduce reliance on imports.

Underground Coal Mining in Central India: Why Urtan Matters

Much of India's coal lies deep. In the Central India coalfields, which include the Sohagpur coalfield of the Son basin in Madhya Pradesh, the deposits lie at depths of up to 1,200 metres, so most of the coal there can be reached only by underground mining, except in a few blocks in the east with opencast potential.

The Singrauli coalfield, which lies partly in Madhya Pradesh and partly in Uttar Pradesh, shows the other model. Systematic mining there began in the Moher sub-basin in the early 1960s under a master plan for large, mechanised opencast mines, and current mining and future blocks are concentrated in that sub-basin.

Commercial auctions have drawn bidders to both kinds of mine. Of the 20 mines auctioned in the first commercial tranche, 12 were opencast, 5 underground and 3 a mix of the two. Urtan's start shows an underground block taken from auction to production.

Commercial Coal Mining in India: From Nationalisation to Open Auctions

Coal Nationalisation, the 2014 Cancellations and the 2015 Act

India's coal was nationalised in two steps under the Indira Gandhi government, the coking coal mines in 1971‑72 and the non-coking mines in 1973 under the Coal Mines (Nationalisation) Act, 1973. State-owned Coal India then held a monopoly on coal mining until 2018.

1. 2014: The Supreme Court cancelled coal blocks that had earlier been allotted for captive use.
2. 2015: The Coal Mines (Special Provisions) Act, 2015, set up a transparent mechanism to return the blocks to industry through auctions; from March 2015 private companies could mine coal for their own cement, steel, power or aluminium plants.
3. January 2018: The Coking Coal Mines (Nationalisation) Act, 1972, and the Coal Mines (Nationalisation) Act, 1973, were repealed.
4. February 2018: The government approved commercial coal mining, permitting private firms to mine coal for sale.

Commercial Coal Auctions Since 2020: Mines Without End-Use Restriction

On 18 June 2020 the Prime Minister launched the auction of 41 coal blocks for commercial mining, using a two-stage electronic auction. India then had the world's fourth-largest coal reserve and was the second-largest producer, yet it was also the second-largest importer.

• Eligibility: Blocks are auctioned without the old end-use criterion, and about 65 per cent of bidders in the first commercial auction came from outside the end-user category.
• Results: In the first commercial tranche, 20 of the 38 mines finally on offer were sold (41 blocks had been announced at the launch), a success rate of about 53 per cent against about 30 per cent in the ten earlier tranches.
• Law: The Mineral Laws (Amendment) Act, 2020, amended the Coal Mines (Special Provisions) Act and the Mines and Minerals (Development and Regulation) Act to widen participation in coal mine auctions and give the Centre flexibility in deciding the purpose of allocation.

Coal Production, Imports and Energy Security in 2025‑26

Coal Production 2025‑26: Captive and Commercial Mines Cross 200 Million Tonnes

Captive and commercial mines produced 210.46 million tonnes of coal in 2025‑26, up 10.22 per cent on 190.95 million tonnes the year before, and dispatched 204.61 million tonnes; both crossed 200 million tonnes for the first time. During the year 12 blocks received mine opening permission, adding more than 86 million tonnes of annual capacity, and 7 blocks began production.

India produced 1,040.08 million tonnes of coal in 2025‑26, against 1,047.52 million tonnes in 2024‑25 and 609.18 million tonnes in 2014‑15. Coal imports by thermal power plants fell to 45.4 million tonnes from 62.5 million, a decline of about 27.4 per cent.

Imports persist for two reasons. Domestic production has not kept pace with demand, so power plants cannot get all the coal they need at home. Indian coal is also largely of low calorific value with high ash, so steelmaking must import the coking coal it needs.

Gondwana Coal Geography and India's Mining Paradox

Where Coal Is Found in India: Gondwana and Tertiary Coalfields

Coal in India occurs in rocks of two geological ages, Gondwana and Tertiary. About 80 per cent of the deposits are bituminous and of non-coking grade, and most of India's coal is Gondwana coal, of low calorific value and high ash content.

• Damodar valley: The most important Gondwana coalfields lie in the Jharkhand-Bengal belt, at Raniganj, Jharia, Bokaro, Giridih and Karanpura; Jharia is the largest, followed by Raniganj.
• Son, Mahanadi and Godavari valleys: These hold the other Gondwana coalfields, with mining centres at Singrauli in Madhya Pradesh, Korba in Chhattisgarh, Talcher and Rampur in Odisha, Chanda-Wardha, Kamptee and Bander in Maharashtra, Singareni in Telangana and Pandur in Andhra Pradesh.
• North-east: Tertiary coal occurs in Assam, Arunachal Pradesh, Meghalaya and Nagaland.
• Coasts and Jammu and Kashmir: Lignite occurs in the coastal areas of Tamil Nadu, Puducherry and Gujarat, and in Jammu and Kashmir.

All of Madhya Pradesh's coal lies in Gondwana coalfields, which is why both new mines are Gondwana mines.

Gondwana Coal Wealth and Mining's Small Role in India's Economy

Despite these reserves, India has for years imported about a fifth of the coal it needs. The sector was confined to captive and non-captive mines, shut out of competition and short of transparency, so it drew little investment and worked inefficiently.

The reforms aim at that gap through open auctions, sale of coal on the market and private capital in harder mines such as Urtan. Coal's growth is also limited by India's climate pledge for 2031‑35, which commits 60 per cent of installed electric power capacity to non-fossil sources by 2035, so new coal capacity must fit within that transition.