Coal news and updates

Centre looks to invite bids for coal block auctions by December 15

Union Coal Secretary SK Srivastava on Monday said the Government is committed to completing the auction of coal blocks “very soon”. He was talking to media persons in Kolkata.

Srivastava, who is scheduled to retire this month, refused to give any timeline for completion of the auction. However, sources told BusinessLine that the Government aims to invite bids by December 15. According to the schedule, auction methodologies should be completed by November 15. The nominated authority, to conduct the auction, may be appointed by November 30.

In a parallel move, the Government will complete the detailed valuation of assets, to fix floor prices for submission of bids. The auction is expected to be completed well within the Court determined window of March 31, 2015.

According to the Srivastava, the Coal Mines (Special Provisions) Ordinance, 2014, has amended the requisite portions of the Coal Mines Nationalisation Act, 1973 (CNM) to help ensure commercial mining of coal by State Government-run outfits.

In its order (in August and September), the Supreme Court cancelled blocks allotted to such outfits citing contradiction with the CNM Act.

“Now there is no difference between the Central government and State government outfits,” Srivastava said.

CIL to be a scapegoat?

Interestingly, the Ordinance does not offer any lifeline (like first right of refusal) to the captive mine operators who have invested heavily in suitable plant and machinery.

Srivastava said such options were avoided to ensure that the Government gets maximum value for resources while the allottees of such blocks have the option to get the mines back by outbidding others in the auction.

When asked if the Government will force Coal India to commit more supplies to captive users who do not get back the mines, Srivastava, without directly referring to linkages, said: “the problem (issuing more linkages than desired) cropped up due to various reasons both internal and external.”

He said the present Government is aiming at resolving issues.

Price pooling revived?

On the issue of how supply gap would be resolved, Srivastava did not have a ready answer. He also sidestepped questions on whether the Narendra Modi Government’s planned to revive the contentious issue of pooling the price of imported coal with domestic production of CIL.

Source: The Hindu BusinessLine