Coal news and updates

 

Vedanta group firm Bharat Aluminium Company (Balco) has withdrawn its court case in the Delhi High Court against the coal ministry's decision rejecting the company's winning bid for a coal block in Chhattisgarh. The government had in March last year rejected bids for three coal blocks — one by Balco and two by Jindal Power Ltd—citing low prices and handed over the mines to state-run Coal India. The companies had moved the Delhi High Court, which had reserved its order on the issue. 

 

But a coal ministry official on Wednesday said Balco has withdrawn the case. Balco did not respond to an email sent by ET seeking comments. The coal ministry had last Wednesday won four cases related to coal auctions with the Delhi High Court pronouncing orders against Monnet Ispat & Energy, Jayaswal Neco Industries, Bhushan Power & Steel and Utkal Coal. 

 

The judgments for all cases related to coal auctions were reserved for over a year. The ministry had rejected price bids for Gare Palma IV/I for which Balco had emerged the successful bidder and Gare Palma IV/2&3 and Tara coal blocks won by Jindal Power, saying they were low in comparison to other mines, while the companies said that no two coal blocks were similar. 

 

Balco had in its petition in the Delhi High Court said that the coal block was required for the company’s 600 MW captive power plant attached to its 3 lakh tonne per annum aluminium plant entailing a total investment of Rs 7,000 crore. 

 

It said that delay in awarding the mine was resulting in production loss of 16,438 tonne per day, leading to a revenue loss of Rs 2.85 crore per day to the firm. The company had also said that mining of the block will yield revenue of Rs 950 crore annually to the government as againstRs 60 crore if the mines were handed over to Coal India. Balco had in its plea said the coal in the Gare Palma IV/1 mine was of inferior quality than that mentioned in the bid documents. 

 

It had also said that the block received less value as it did not have any coal evacuation system. It also cited that the winning company for the block would have to take a host of regulatory approvals to mine fresh patches of the Gare Palma IV/1block. 

 

The coal ministry had argued that the gross calorific value of the coal in the mine is accurate as it is based on data made available by the Central Mine Planning and Design Institute. It has also junked the firm’s other two arguments. Balco had submitted best bid of price of Rs 1,585 per tonne for Gare Palma IV/1, while Hindalco bagged a mine for the steel sector in the same Gare Palma stretch at Rs 3,502 per tonne and another at Gare Palma IV/4 at Rs 3,001. 

 

Similarly, Jindal Power submittedRs 108 per tonne price for Gare Palma IV/2&3 coal block while foregoing the mining cost. The Tara coal block received a price of Rs 126 per tonne, while other mines received higher value from other companies.

SOurce:Economic Times