Coal news and updates

The first-ever auction of captive coal mining assets has turned out to be a damp squib.

 

In March, the Coal Ministry put three blocks — one each for the steel, cement and sponge-iron sectors — up for auction.

 

Over 40 companies, including almost all the industry leaders in the respective sectors, purchased the bid documents.

 

But, as the bidding closed on Wednesday, there were no takers for the Jhirki and Jhirki-West and Tokisud-II blocks in Jharkhand, which have been reserved for the steel and cement sectors, respectively.

 

Only two Kolkata-based sponge iron outfits — Shyam Sel and Rashmi Metaliks — are said to have submitted bids, for the small Andal Babuisol asset.

 

The underground reserve can produce about 0.7 million tonnes of coal annually for 25 years.

 

All the blocks have land-related issues.

 

The bidders were expected to make an up-front payment of ₹35-45 crore. This would be over and above the production sharing contract.

 

Auction on hold?

According to sources, Coal Minister Piyush Goyal recently stressed that the blocks should be auctioned only after securing the necessary environmental and land-related clearances. This may see the auction process put on hold as the clearances take time, months and sometimes years to be processed.

 

 

Source: http://www.thehindubusinessline.com/