Coal news and updates

Bharadwaj clears terms & conditions for mines operation by successful bidders

January 27: The successful bidder will have to conduct mining operations at the coal mine in accordance with the milestones or “Efficiency Parameters” and failure to comply with it would result in appropriation of the Performance Security in the manner stipulated in clause 6, said Vivek Bharadwaj, Joint Secretary in the Ministry of Coal and the Nominated Authority for the coal auctions.

Detailing the salient features of Coal Mine Development and Production Agreement (CMPDA), which specifies the terms and conditions of operation of the mines by the successful bidder in the auction, Bharadwaj said on January 23 that successful bidders will also have to comply with all the applicable laws in relation to health, safety, welfare, social security and minimum wages for the workers.

As per the CMPDA, failure to adhere to the conditions of vesting and non-compliance will result in withdrawal or cancellation of vesting order, the Joint Secretary said.

Bharadwaj mentioned that the successful bidder will have to make upfront payment against the blocks in three instalments and there will be appropriation of Bank Guarantee (BG) in case of failure.

The successful bidders will have to provide performance security (BG) which will be aggregate of (a) one year royalty, (b) annual peak rated capacity of mines multiplied by Final Price Offer, he said.

The failure to pay upfront amount and additional levy, non-compliance with anti-corruption laws, failure to pay monthly payment etc. may lead to termination of the agreement.