Companies

Coal mine auctions: Bidding for Chhattisgarh’s Gare Palma breaches record

Our Bureau New Delhi | Updated on November 09, 2020

Sarda Energy offers 66.75% revenue share

The last day of the commercial coal mining auctions saw new records being created. Sarda Energy and Minerals Ltd bagged the Gare Palma IV/7 coal mine in Chhattisgarh, the only one on offer on the final day of the first round, at a closing bid value of 66.75 per cent.

This was the most hotly contested mine in the auction with Adani Enterprises, Bharat Aluminium Company, DB Power, Hindalco Industries, Jindal Power, JSW Steel and Nuvoco Vistas Corporation also gunning for it. The winner, Sarda Energy, part of the Sarda Group, has a steel plant in Raipur, Chhattisgarh.

 

No end-use restrictions

Companies competed on the portion of revenue they would share with the respective State government. There was no end-use restriction on the excavated coal. This means the companies can sell the coal in the open market or use it themselves. This was the first time that coal mines were auctioned in the country without any end-use restrictions.

In all, the Ministry of Coal auctioned 19 mines over bidding rounds that began on November 2. The initial goal was to bid out 38 coal mines with an anticipated annual revenue of ₹20,000 crore (at peak rated capacity of mines) accruing to the States where they are located. With the 19 mines being bid out, the Centre is now estimating an annual revenue of ₹7,000 crore to the States.

The second highest bid in the auctions was made by Boulder Stone Mart that quoted 54 per cent revenue share. It bagged the Gotitoria (East) and Gotitoria (West) coal mines in Madhya Pradesh.

The Urtan North coal mine, also in Madhya Pradesh, was awarded to JMS Mining at a final offer of 9.5 per cent revenue share. This was the lowest bid value at the auctions.

 

50% success rate

“The success rate for this round of bids is 50 per cent since half the mines on offer found takers,” said Coal Minister Pralhad Joshi. “The success rate in the earlier rounds was around 30 per cent.” The bidding will lead to an upfront payment of ₹1,048 crore for the 19 coal mines, he added.

Joshi further said the Coal Ministry is gearing up for the next round of auctions. Those mines that got a single bid this time will also be allowed to be put on the block in the next round, he added.

Published on November 09, 2020

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