Coal mine auction: Bidders flag distance of new blocks from consuming centres

Twesh Mishra New Delhi | Updated on September 10, 2019

Potential bidders for the next round of coal auctions have expressed concern over the lower number of coal mines being put up for auction in the Eastern part of the country.

At a meeting called by the Coal Ministry of the stakeholders, prospective bidders pointed out that the end-use industries (coal consumers) are in the East, but a majority of the blocks on offer are in the Western part, specifically Maharashtra.

“This is a deterrent and may hamper the viability of the auctions as the coal transport costs will go up significantly for steel, power and other such large industry players that win these far away blocks,” a participant in the meeting called by the Ministry of Coal told BusinessLine.

Attracting bidders

The meeting was held to sensitise and interact with prospective bidder companies regarding the 8th, 9th and 10th tranches of coal mine auction currently under process.

The highest number of mines are being offered during the 8th tranche for the unregulated sector (this means that any industry can bid for using this coal).

During this round, there are nine mines in Maharashtra, four in Chhattisgarh, two in Madhya Pradesh, three in Jharkhand, and two in West Bengal up for grabs.

Read: Coal production from auctioned mines set to soar to 45 mt this fiscal

Responding to industry concerns, officials from the Ministry of Coal said that there will be more coal mine auctions in the future too and then this concern will be addressed.

There are five coking coal mines in Jharkhand, and one in Madhya Pradesh during the 9th tranche that have been earmarked for the steel sector. In the 10th tranche there is one on offer in Odisha, which is for the un-regulated sector.

The Ministry has started the process of auctioning 27 coal mines and allotting 15 coal mines to Central and State public sector undertaking companies.

As per the objective of auctioning of coal blocks, the government is auctioning 21 coal mines for ‘End Use Non Regulated Sector’ and six coking coal mines for End Use iron and steel. In case of allotment, five coal mines are for power sector, nine for sale of coal and one for iron and steel.

Published on September 10, 2019

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