Coal news and updates

‘Govt should not re-allocate mine won in the auction’

March 20: Even as the government is still in the process of looking at whether the prices quoted for eight blocks were good enough or not for the government, an official from a steel company that participated in the coal auctions but whose block is not amongst the controversial ones, told ICMW: “The government should not change the rules. All prices discovered are still higher than the existing prices. It should not plan to re-allocate the mines in order to avoid unnecessary disputes between the government and the successful winner.”

The source added: “If companies meet their complete requirement in the long run by buying these blocks at such high prices, their profitability will be impacted adversely or else commodity prices shall rise to support their businesses.”

It may be recalled that the government may re-auction or give over to PSU entities 8 blocks for which it feels the bid price fell short of expectations.

Earlier, Coal Secretary Anil Swarup had said the government was “looking at whether the price that was quoted is good enough for the government or not, and whether we could get a better price”.

Companies that could lose their won coal mines, after a high-decibel bidding outcome include heavyweights like the Aditya Birla group-owned HINDALCO, Jindal Steel & Power, Usha Martin and Jaypee Cements.

According to reports, the ministry is vetting the bids of blocks like Brinda and Sasai, bidding for which had opened at Rs 1,802 per ton but had closed at Rs 1,804 per ton.

Similarly, bidding for Meral had opened at Rs 725 per ton but closed at Rs 727 a ton.