New Delhi: Government kitty has swelled by Rs 12,591 crore with the sale of three mines to Hindalco, Jindal Power and Indrajit Power today, the third day of the second tranche of coal block auctions.
Amid stiff competition from bidders, Hindalco Industries won Dumri mine in Jharkhand, Jindal Power grabbed Tara block in Chhattisgarh and Indrajit Power clinched Nerad Malegaon block in Maharashtra.
“Indrajit Power bids the highest for Nerad Malegaon for Rs 660 (a tonne). Hindalco highest bidder at Rs 2,127 (a tonne) for Dumri and Jindal Power at Rs 126 (a tonne) for Tara coal block,” Coal Secretary Anil Swarup tweeted.
These three mines would contribute a cumulative Rs 12,591 crore to the state exchequer. With the three blocks, the government stands to garner over Rs 1.43 lakh core, including over Rs 1 lakh crore from the auction of 19 blocks in the first tranche. Three more coal blocks will be put up for auction when the bidding starts tomorrow.
The amount of proceeds has been calculated based on extractable reserves and highest bid price.
Hindalco Industries has bagged Dumri mine in Jharkhand for an estimated Rs 9,809 crore, while Jindal Power won Tara block in Chhattisgarh for Rs 2,103 crore. Indrajit Power bagged Nerad Malegaon block for Rs 679 crore.
“Auction for Tara block, which is for power sector, began at 11 am with rupee one bid. For Dumri, the auction began at Rs 2,125 per tonne while for Nerad Malegaon it started at Rs 413 per tonne,” an official said.
For Tara block, it was reverse bidding while for the other two it was forward bidding.
On March 5, in fierce bidding that lasted over eight hours, Mandakini Exploration and Mining bagged Mandakini block in Odisha, while the Meral mine in Jharkhand went to Trimula Industries, in the process fetching an estimated Rs 19,633 crore for the states.
On March 4, the first day of the second round of the auction, three mines that were sold garnered Rs 11,083 crore.
In the second leg of the coal block auction, government has put up 15 blocks for sale, which are under the ‘ready-for- production’ category.
The auctions follow the Supreme Court’s decision last year to cancel the allocation of 204 coal mines.
To grab Dumri block in Hazaribag district of Jharkhand, which has an extractable reserves of 46.13 million tonnes (MT), there were eight players.
The companies included Balco, Easternrange Coal Mining Pvt Ltd, Hindalco Industries Ltd, Lakeview Dealtrade Pvt Ltd, Rungta Mines Ltd, Natural Resources Pvt Ltd, Sesa Sterlite Ltd and Usha Martin Ltd.
The mine was previously allotted to Nilachal Iron & Power Ltd and has preliminary forest clearance and awaits forestry clearance for mining lease.
As many as 9 firms — Adani Power, Adani Power Rajasthan, Adani Power Maharashtra, Athena Chhattisgarh Power, Jindal Power, JSW Energy, KSK Mahanadi Power Company, LANCO Amarkantak Power and RattanIndia Nasik Power — were vying for Tara block in Surguja district of Chhattisgarh.
The block with extractable reserves of 166.92 MT was previously allotted to Chhattisgarh Mineral Development Corp.
The third mine put on auction today – Nerad Malegaon in Yavatmal district in Maharastra has extractable reserves of 10.29 MT.
It was previously allotted to Gupta Metallics & Power Ltd and Gupta Coalfields & Washeries Ltd.
Among the players in race for it were Godawari Power and Ispat, Grace Industries, Indrajit Power, OCL Iron & Steel and Sunflag Iron & Steel Company.
There are two methods of bidding for auction of coal blocks — forward bidding (for unregulated sectors like steel, cement and captive power) and reverse bidding (for specified end use for power generation).
In the reverse auction, the government sets a ceiling price that is representative of production cost of Coal India. The private sector companies, which are considered more efficient, are expected to bid at lower price.
For example, if the ceiling price is Rs 1,000 and the bidder bids Rs 800, then the benefit of Rs 200 is directly passed on to consumers. This would mean if the power is sold at Rs 3.50, out of which Re 1 is cost coal and the same will become 80 paise because of pass through benefit of Rs 200. Thus, the new price of power will be Rs 3.30 a unit.
In case the bids touch zero, meaning that the private producer is ready to pass on the benefit of coal extraction to power consumers, there would be a forward bidding.
Under the forward bidding, the companies will be required to mention the price which they are willing to give to States.
Meanwhile, the Delhi High Court has allowed Jayaswal Neco Industries Ltd (JNIL) to participate in the auction tomorrow for a coal block in Chhattisgarh as a technically qualified bidder.
The Court passed the order on JNIL’s plea challenging the coal ministry’s decision rejecting the company’s technical bid on the ground that its coal requirement does not meet the extractable reserves of the Gare Palma IV/8 mine.
Your email address will not be published. Required fields are marked *
Save my name, email, and website in this browser for the next time I comment.
Sign me up for the newsletter!
Notify me of follow-up comments by email.
Notify me of new posts by email.
VBM Flight AIIX 1344 Incident At Kozhikode On August 7, 2020
Delhi Airport develops portal for all international arriving passengers across India
Kia Motors unveils the Sonet smart urban compact SUV
How SEO can Improve your Website Ranking and Traffic?
FMCS Statement on Continued Labor Negotiations Between Bath Iron Works and International Association of Machinists
2014 The Global Indian New Network (TGINN)