The Mines Department of Government of Jharkhand has revised coal prices from June 2025 and directed that royalty be calculated based on market rates, even for subsidised coal supplied to power plants. This aims to increase state revenue and standardize royalty collection.
The Department of Mines has issued a fresh notification announcing new coal rates effective from June 2025 until further orders. According to the department, royalty on coal will now be calculated based on market prices, even in cases where coal is supplied to power plants at subsidised rates. The new directive, issued by Mines Secretary, Government of Jharkhand Mr. Arwa Rajkamal, has been shared with all District Mining Officers (DMOs) across the state. The officials have been instructed to calculate and collect royalty as per the weighted average price of coal, even for coal sent to power sector companies. This move will impact how much companies pay to the government for coal mining rights.
Also Read: Coal India Revised Land Compensation Policy, Offers Bigger Compensation for Land Without Job
Key Points of the New Notification
-
Market Rate-Based Royalty:
Even if Coal India or its subsidiaries supply coal to thermal power plants at subsidised rates (around Rs. 950 per tonne), the royalty will be calculated on the prevailing market price, which is usually above Rs. 4000 per tonne through auctions. Earlier, royalty was calculated based on the actual price at which coal was supplied. -
Monthly Rate Update:
The Mines Department updates coal prices every month. From April 2025, royalty is being collected based on market rates instead of subsidised rates. -
Special Provision for Rajmahal Region:
For coal blocks operating in the Rajmahal area, an additional Rs. 700 per tonne will be added to the base rate for royalty calculation. The respective DMOs are instructed to ensure compliance with this rule.
Revised Coal Prices as per Grade
-
G1 Grade (Highest quality): Rs. 4650.96
-
517 Grade: Rs. 2557.54
-
Washery Grade 1: Rs. 6018.63
-
Washery Grade 6: Rs. 3372.60
-
Steel Grade 2: Rs. 2557.54
These rates will form the basis for royalty collection across districts, ensuring higher revenue for the state from coal mining operations.
Why This Change Matters
Earlier, royalty on coal sent to power plants was calculated based on low subsidised prices, leading to less revenue for the state government. But now, even if the coal is sold at cheaper rates to power companies, royalty will be charged at full market value. This policy ensures a fair return to the state for its mineral resources. This step is also expected to increase transparency and standardise royalty calculations across the coal industry.
Also Read: Electricity May Get Costlier in Jharkhand, JBVNL Wants 40% Hike
