Under the second round of auction for commercial mining, out of the 67 blocks provided, only 19 coal mines were accepted by the Union coal ministry. For commercial coal mining, 20 companies have set 34 bids, the government said. Burakhap mine in Jharkhand received the maximum interest with five bids which is followed by the Rauta mine in the same state which received four bids.
Under the second round of commercial mining auctions, real estate firm Aurobindo Ghosh and Sunflag Iron and Steel have each placed bid for four coal blocks, the maximum bid by a single firm. Vedanta placed bids for one mine and its subsidiary, Bharat Aluminium Company has bid for another block. Furthermore, Adani Power Maharashtra and Aditya Birla Group’s Hindalco Industries have put up bids for one block each. The auction also included some other bidders like Adhunik Power, Rungta Mines, Prakash Industries, and Shree Sai Urja. The state government undertaking company Chhattisgarh Mineral Development Corporation has also put forward one bid.
On March 25, the ministry launched the second auction for coal blocks allowing the private players to participate with no end-use restrictions. During the first round of auction in November last year under the new commercial coal mining policy, the response from investors was lukewarm, as financial bids for only 19 mines were received out of the 38 blocks put on auction.
This is the second set of coal assets auctioned off through the new ‘market-determined revenue share model’ replacing the ‘fixed fee/tonne regime’ that had earlier disinterested private investors. The responses received in both sets of commercial coal auctions are more encouraging than the previous ten auctions under the earlier regime, where bids were received for only 35 mines out of the 116 offered.
Under the commercial coal mining policy, the domestic and home-grown firms bid for the maiden auction. The highest premium received was 66.8% while the average premium stood at 29%.
It is notable that the 67 mines put up for auction have total coal reserves of about 36,000 million tonnes (MT). The government had said earlier that for the second auction tranche, the mines falling in wildlife reserves and having more than 40% green cover, will be excluded to allay the fears regarding environmental norms. Mines currently under litigation or overlapping with the active coal-bed methane blocks were also excluded from 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 are allocated to different entities currently. Public sector undertakings currently own blocks with combined reserves of nearly 2 lakh MT.
