UPSC Prelims Practice Questions — COAL EXCHANGE RULES

Q1. Consider the following statements regarding the statutory basis of coal and mineral trading reform: 1. Section 18B was inserted into the Mines and Minerals (Development and Regulation) Act, 1957 by the amending Act of 2025, whereas the Mineral Laws (Amendment) Act, 2020 had amended that Act together with the Coal Mines (Special Provisions) Act, 2015. 2. Section 18B empowers the Central Government to promote the development of a market, including trading, in minerals, their concentrates and processed forms through mineral exchanges, in the manner provided by rules. 3. Unlike the position obtaining before it, the amending Act of 2025 retained the ceiling permitting captive mines to sell only up to fifty per cent of the minerals produced in a year. Which of the statements given above is/are correct?

  1. Section 18B was inserted into the Mines and Minerals (Development and Regulation) Act, 1957 by the amending Act of 2025, whereas the Mineral Laws (Amendment) Act, 2020 had amended that Act together with the Coal Mines (Special Provisions) Act, 2015.
  2. Section 18B empowers the Central Government to promote the development of a market, including trading, in minerals, their concentrates and processed forms through mineral exchanges, in the manner provided by rules.
  3. Unlike the position obtaining before it, the amending Act of 2025 retained the ceiling permitting captive mines to sell only up to fifty per cent of the minerals produced in a year.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q2. Applicants seeking registration of a Coal Exchange remit the prescribed fees through which one of the following Government platforms?

  • A. Government e-Marketplace (GeM), the procurement portal administered by the Ministry of Commerce and Industry
  • B. Public Financial Management System (PFMS), the fund-flow platform of the Department of Expenditure
  • C. BharatKosh, the Non-Tax Receipt Portal of the Government of India
  • D. e-Kuber, the core banking solution operated by the Reserve Bank of India

Q3. The Coal Controller's Organisation was designated the Authority responsible for registering and regulating Coal Exchanges in which one of the following?

  • A. August 2025, when the amending mineral law received the assent of the President
  • B. September 2025, when the provisions of the amending mineral law came into force
  • C. June 2026, when the Coal Exchange Rules were published in the Official Gazette
  • D. December 2025, in advance of the notification of the Coal Exchange Rules

Q4. Consider the following statements about the division of functions between the Authority and a registered Coal Exchange: 1. Quality assurance on the exchange rests on coal sampling agencies approved by the Authority, and not on self-certification by the seller. 2. Registration granted by the Authority to an entity to establish and operate a Coal Exchange remains valid for a period of twenty-five years. 3. Whereas market rules and bye-laws are formulated by the exchange itself with the prior approval of the Authority, the guidelines governing the application and registration process were framed by the Authority within a month of publication of the Rules. Which of the statements given above is/are correct?

  1. Quality assurance on the exchange rests on coal sampling agencies approved by the Authority, and not on self-certification by the seller.
  2. Registration granted by the Authority to an entity to establish and operate a Coal Exchange remains valid for a period of twenty-five years.
  3. Whereas market rules and bye-laws are formulated by the exchange itself with the prior approval of the Authority, the guidelines governing the application and registration process were framed by the Authority within a month of publication of the Rules.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q5. Which one of the following was the first step to permit auction of coal blocks with no restriction on the sale or utilisation of the coal mined, thereby beginning the move away from the government-linked 'one-to-many' allocation model?

  • A. The Non-Regulated Sector coal linkage auction policy introduced in 2016 for long-term supply
  • B. The first tranche of commercial coal mine auctions launched in June 2020 on a revenue-sharing basis
  • C. The CoalSETU window created in 2025 within the linkage auction policy for industrial use and export
  • D. The Coal Exchange Rules published in the Official Gazette in June 2026 for many-to-many trading

Q6. With reference to the shift from a 'one-to-many' coal sales model to a 'many-to-many' exchange-based model, consider the following: 1. Coal producers, including commercial and captive miners, obtain easier access to a wider pool of buyers. 2. Buyers and sellers may transact and enter into delivery-based coal contracts as approved by the Authority. 3. Prices on the platform are administratively fixed by the Authority, the exchange only matching the quantities offered and sought. 4. Processed forms of coal lie outside the ambit of trading on the exchange. Which of the above is/are correctly identified?

  1. Coal producers, including commercial and captive miners, obtain easier access to a wider pool of buyers.
  2. Buyers and sellers may transact and enter into delivery-based coal contracts as approved by the Authority.
  3. Prices on the platform are administratively fixed by the Authority, the exchange only matching the quantities offered and sought.
  4. Processed forms of coal lie outside the ambit of trading on the exchange.
  • A. 1 and 3
  • B. 1 and 2
  • C. 2 and 4
  • D. 1, 3 and 4

Q7. With reference to the Coal Exchange Rules, 2026, consider the following: 1. They were published in the Official Gazette on 4 June 2026 by the Ministry of Coal. 2. They followed the coming into force, on 1 September 2025, of the amending mineral law that enabled them. 3. They were framed in exercise of powers conferred by the Coal Mines (Special Provisions) Act, 2015. 4. Their subject matter extends to processed forms of coal and not merely to coal as mined. Which of the above is/are correctly identified?

  1. They were published in the Official Gazette on 4 June 2026 by the Ministry of Coal.
  2. They followed the coming into force, on 1 September 2025, of the amending mineral law that enabled them.
  3. They were framed in exercise of powers conferred by the Coal Mines (Special Provisions) Act, 2015.
  4. Their subject matter extends to processed forms of coal and not merely to coal as mined.
  • A. 1 and 3
  • B. 2 and 4 only
  • C. 1, 2 and 4
  • D. 1, 3 and 4

Q8. Under the framework notified in 2026, a 'Coal Exchange' is best described as which one of the following?

  • A. A network of physical coal depots run by the Coal Controller's Organisation for pooling and swapping coal of different grades among producers
  • B. A clearing house that settles cash-settled contracts referenced to coal price indices, carrying no obligation of physical delivery
  • C. An online platform on which buyers and sellers of coal and its processed forms transact and enter into delivery-based contracts approved by the Authority
  • D. A window under the linkage policy through which producers auction long-term coal supply to non-regulated sector consumers

Q9. Which one of the following is the apex Trust whose scope and territorial domain were widened by the amending mineral law of 2025 to allow its funds to be used outside India for exploration and development of mines and minerals?

  • A. National Mineral Exploration and Development Trust
  • B. District Mineral Foundation established in mining-affected districts
  • C. National Mineral Development Corporation, a public sector mining enterprise
  • D. Indian Bureau of Mines, the technical regulator of mineral conservation

Q10. The enabling provision inserted in 2025 permits promotion of markets through mineral exchanges in respect of which one of the following?

  • A. Only such minerals as are notified by the Central Government as critical and strategic minerals under the Act
  • B. Minerals in their raw form alone, concentrates and metals being left to be governed by separate commodity market law
  • C. Only minor minerals, trading in which is regulated by the State Government within whose territory they occur
  • D. Minerals, their concentrate and their processed forms, including metals

Q11. Under the CoalSETU window approved by the Cabinet in 2025, up to what proportion of the coal linkage quantity obtained is a linkage holder eligible to export?

  • A. Twenty-five per cent
  • B. Seventy-five per cent
  • C. Fifty per cent
  • D. No ceiling is prescribed, export being freely permitted

Q12. The Ministry of Coal's framework governing operation of the Coal Exchange and structured price discovery has been issued with reference to which one of the following provisions?

  • A. Section 11A of the Mines and Minerals (Development and Regulation) Act, 1957
  • B. Section 18B(3) of the Mines and Minerals (Development and Regulation) Act, 1957
  • C. Section 17A of the Mines and Minerals (Development and Regulation) Act, 1957
  • D. Section 4 of the Coal Mines (Special Provisions) Act, 2015