Saturday, June 3, 2023

Commercial mining: Govt gets bids for 19 coal mines out of 67 on offer


coal mine, coal mine jharkhandThe 67 mines put up for auctions have total coal reserves of about 36,000 million tonnes (MT) of the fuel (Photo: Reuters)

The Union coal ministry has received bids for only 19 coal mines out of the 67 blocks offered under the second round of auction for commercial mining. As many as 20 companies have cumulatively placed 34 bids for commercial coal mining, the government said .

Burakhap mine in Jharkhand received the maximum interest with five bids, followed by the Rauta mine in the same state, which received four bids. Real Estate firm Aurobindo Realty and Sunflag Iron and Steel have each placed bids for four coal blocks, the maximum bid by a single entity under the second round of commercial mining auction. Vedanta submitted bids for one mine and its subsidiary Bharat Aluminium Company has bid for another block. Adani Power Maharashtra and Aditya Birla Group’s Hindalco Industries have bid for one block each. Some other bidders include Adhunik Power, Rungta Mines, Prakash Industries and Shree Sai Urja. State government undertaking company Chhattisgarh Mineral Development Corporation has submitted one bid as well.

The ministry had on March 25 launched the second auction for coal blocks where private players can participate without any end-use restrictions. Even the first round of auction under the new commercial coal mining policy had received modest response from investors in November last year, when financial bids were received for 19 mines out of the 38 blocks put on auction.

This would be the second set of coal assets to be auctioned off through the new market-determined revenue share model that replaced the fixed fee/tonne regime that had earlier turned off private investors. The responses received in both the tranches of commercial coal auctions are still far better than the previous ten auctions under the earlier regime, where bids were received for only 35 mines out of the 116 offered.

The maiden auction under the commercial coal mining policy saw bidding by domestic and home-grown firms, and the highest premium received was 66.8% while the average premium quoted was 29%.

The 67 mines put up for auctions have total coal reserves of about 36,000 million tonnes (MT) of the fuel. The government had said earlier that for the second auction tranche, it will exclude mines falling in wildlife reserves and have more than 40% green cover to allay the fears regarding environmental norms. Mines currently under litigation or overlapping with active coal-bed methane blocks were also not included in the latest list. Out of the 3.4 lakh MT of total coal reserve in the country, mines with extractable reserves of 2.3 lakh MT currently stand allocated to different entities. Public sector undertakings own currently own blocks with combined reserves of nearly 2 lakh MT.

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