Single-bid mines will be re-auctioned within a fortnight: Coal Minister

Twesh Mishra New Delhi | Updated on November 12, 2020

Says he doesn’t plan to return to end-use mining regime

The Ministry of Coal will be re-auctioning and awarding coal mines that had got single bids in the commercial coal mine auction rounds, within the coming fortnight. In an interview to BusinessLine, Pralhad Joshi, Minister for Coal and Mines, said these mines will be re-auctioned and if they receive single bids again, they will be awarded to the sole bidder. He also said the next round of commercial coal mining auctions will happen by mid-January 2021. Excerpts:

By when can we expect the next round of auctions? Is there any more legislative change required to enable the sale of single-bid mines?

There is already a Cabinet approval for awarding single-bid mines. It is there within the policy. Hopefully, the next tranche of commercial coal mine auction, I want to do it in mid-January itself.

Around half the mines were sold in the commercial mining auctions. What can be done to better the results?

More than half the mines found interest during the bidding process. Out of 38, 19 got more than two bidders, but we have received single bids for three. We have made a provision that even if there is a single bid, immediately we can take it for re-auction. This will be done while taking the price quoted in the single bid as the base price.

So, we will do it immediately, within a fortnight or maximum 20 days. If there is a single bid the next time, too, the mine is awarded.

By that there is a 58 per cent success rate. To further improve this, I would urge State governments to assess the benefits that accrue. Jharkhand had the maximum opposition to bidding, but it also got the highest revenue in spite of that. Out of nine, we could only sell around five mines.

Whereas, in Madhya Pradesh, there were 11 mines, of which eight we sold because there was no opposition.

I have been requesting State governments to cooperate in the auctions. I will once again go and meet Chief Ministers of mineral States. I will also request the Jharkhand Chief Minister and apprise him of the gains of commercial coal mining.

Companies from beyond traditional sectors such as mining, power generation, and steel have also participated in the bidding. This is encouraging and I hope bidders from other countries also participate in subsequent auctions.

How comfortable are you with the variation in revenue share that has been committed for awarding mines? The revenue share is well above 50 per cent for some mines, and for others, it is below 15 per cent. What are the factors for this?

One is competition, the second is atmosphere in that particular area — if it is conducive for immediate production, operation and quality of coal. It differs across mines, and bidders will assess. It has happened on that basis. The government has got nothing to do with that.

Can we expect a return to the end-use mining regime? Will any mines ever be auctioned with that clause?

At least I do not have that idea. Why do we need to have end-use restrictions at all! Why should we continue with something that is anti-competitive!

Can we expect Coal India Ltd (CIL) to also participate in commercial mining bids? Or do you feel Coal India has enough resources right now?

Coal India has got enough resources and is financially sound, too. Another point to note is that CIL has been allotted coal mines that are sufficient for more than 100 years. We are not withdrawing a single coal mine allotted to CIL.

How can we better CIL’s performance? How prepared are we to meet the 1 billion tonne coal production target?

We are planning for CIL to have 1 billion tonne coal production in 2023-2024. But we have told CIL to upgrade itself to meet that target. An immediate investment of ₹50,000 crore has been announced by Finance Minister Nirmala Sitharaman under the Atmanirbhar Bharat package. Another ₹70,000 crore is being invested for upgrading coal infrastructure. All around ₹1.20-lakh crore is being invested in CIL to build infrastructure over the coming four to five years. New machinery and technology that we are bringing will improve CIL’s performance.

Published on November 12, 2020

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