Underground coal mining presents numerous advantages over opencast methods, especially in terms of environmental sustainability, land-use efficiency, and reduced social disruption. As it causes minimal surface disturbance, underground mining helps preserve vital infrastructure, agricultural lands, forests, and residential areas.
From an environmental perspective, underground mining generates considerably less dust and noise pollution than surface mining. It is particularly effective for accessing deep-seated coal reserves, which often have superior quality. Additionally, because it leaves a smaller surface footprint, underground mining contributes to lower greenhouse gas emissions associated with land degradation and vegetation loss.
Operationally, underground mines are less affected by adverse weather conditions such as heavy rains or floods, which can often halt opencast mining. This resilience makes underground mining a safer and more reliable option throughout the year.
Policy Support and Incentives
To encourage the adoption of underground mining, the Government has revised its auction framework. The original methodology dated 28.05.2020 for auctioning coal and lignite blocks on a revenue-sharing basis was amended on 23.04.2025 to include specific incentives for underground mines. These include:
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Reduced floor percentage of revenue share to just 2%
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Complete waiver of the Upfront Amount
These benefits are exclusive to bidders participating in auctions specifically reserved for underground mining. To maintain the integrity of this policy, mines allocated under this scheme cannot be converted into opencast or mixed mining operations at any stage during their lifecycle.
Declining Trend and Efforts to Revive
Despite its advantages, the share of underground coal mining in India’s total coal production has been declining over the past five years:
| Year | % Share of Underground (UG) Production |
|---|---|
| 2019–20 | 5.54% |
| 2020–21 | 4.50% |
| 2021–22 | 4.26% |
| 2022–23 | 3.90% |
| 2023–24 | 3.44% |
Technological and Operational Measures
In addition to policy-level interventions, coal companies are adopting a range of strategies to revive and expand underground mining operations. These include:
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Mass Production Technology to improve efficiency and output
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Implementation of Mine Development and Operation (MDO) projects to manage mines through private operators under revenue-sharing models
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Re-operationalization of abandoned or discontinued underground mines via MDO agreements, enhancing resource utilization
These concerted efforts aim to reverse the declining trend in underground coal mining and promote a more environmentally sustainable and socially responsible approach to coal extraction in India.
