The Ministry of Coal has notified the Coal Exchange Rules, 2026 under Section 18B of the Mines and Minerals (Development and Regulation) Act, 1957, establishing a comprehensive regulatory framework for transparent and efficient trading of coal, lignite, and their processed forms. The rules designate the Coal Controller Organisation (CCO) as the Authority responsible for registering and regulating Coal Exchanges, with powers to evaluate, grant, renew, and revoke exchange registrations while approving exit schemes at registration.
The Authority maintains administrative control by approving bidding and price discovery mechanisms, contract specifications regarding scheduling and delivery, quality standards, bid types, transaction fee ceilings, and operating procedures. It exercises market oversight to detect and prevent market manipulation, cartelization, insider trading, and abuse of dominant position, with powers of intervention, interim orders, and inspection in case of violations.
Coal Exchanges are defined as online platforms where buyers and sellers transact, trade, and enter into delivery-based contracts. They must operate with objectives including formulating coal supply contracts, facilitating transactions, ensuring fair and transparent price discovery, and securing efficient coal supply. Exchanges must operate electronic trading systems utilizing network communication and maintain a Settlement Guarantee Fund (SGF) managed by an independent committee, with at least 50% invested in safe/liquid instruments including fixed deposits with scheduled public sector banks, treasury bills, and government securities.
Operational requirements include establishing a market surveillance committee and department for day-to-day monitoring, maintaining automated audit trails for bids, executing security audits of IT systems, maintaining a disaster recovery site, and providing alternate trading facilities for business continuity. Exchanges must also operate grievance redressal forums, with the Authority empowered to call for information regarding specific grievance resolutions.
The estimated timeline for operationalization of regulated coal exchanges is 12 months from the date of receipt of applications on the dedicated online application platform opened on July 15, 2026. Participation is open to any entity including captive and commercial miners, consumers, and small and medium consumers in the non-regulated sector. Price discovery must be conducted through mechanisms ensuring fair, neutral, competitive, and efficient prices, with final prices adjusted based on coal quality through contract-specified adjustment mechanisms and quality certification from coal sampling agencies.