Coal news and updates

Coal auction: eastern States eye ₹1,280 cr

Coal-rich eastern States are in for a bonanza as they will get close to ₹1,280 crore from the latest round of coal auction by this month-end, with ₹650 crore already transferred to their kitty.

The last three rounds have generated proceeds of more than ₹3 lakh crore, which will be realised over 30 years by Jharkhand, Chhattisgarh, Odisha, and West Bengal, in addition to Maharashtra and Madhya Pradesh, where these mines are located.

“As provided in the Act, the proceeds of coal block auctions will go to States. We have already transferred ₹650 crore to States and another ₹630 crore will go to them by the end of the month,” Vivek Bhardwaj, the nominated authority to conduct the coal block auction, told PTI.

Bhardwaj said fund flow would pick up as the mines start production. Of the 34 coal blocks that had been allocated or auctioned under Schedule II – either producing or likely to produce mines – one is under litigation and seven of them have recorded over 5 million tonnes (MT) of output.

The remaining 26 blocks, as per the Centre, are likely to start production “in the next 2-3 months” as all issues, including necessary clearances, stamp duty, handing over of assets, etc, have been resolved on the intervention of Prime Minister Narendra Modi, who himself reviewed the projects.
Auction phases

These auctions were done in three tranches, while the process for the fourth round in which eight coal blocks will go under the hammer, has been set into motion. These eight blocks will be auctioned from January 18-22 next year.

The mines to be put on the block include Brahmapuri and Suliyari in Madhya Pradesh, Bundu and Gondulpura in Jharkhand, Gondkhari and Khappa & Extn in Maharashtra and Jaganathpur A & Jaganathpur B in West Bengal.

These mines have reserves totalling 1,143.42 million tonnes (mt) and their peak rated capacity stands at 12.86 mt. The amount to be raised from this round will depend on the response from bidders.
Earlier court order

The Supreme Court, in September last year, had cancelled allocation of 204 coal mines to companies without auction, which led to the Centre announcing the ongoing auction.

Official auditor CAG had said that mines allocation without auction during the previous regimes led to a notional loss of staggering ₹1.86 lakh crore.

However, the proceeds to be realised during the next 30 years, as per government announcements, have already crossed the ₹3-lakh-crore mark.

source: http://www.thehindubusinessline.com