Coal news and updates

Coal block auction: no cap on number of bids in round one

The first round of coal block auctions will not put a cap on the number of blocks a developer can bid for.

“In this round, the cap is not required as there are stipulations on end-use as well as investments. The need for imposing a restriction will arise when the sector is opened up for commercial mining,” a senior official said.

To prevent monopolies, the Government intends to restrict the number of coal blocks a company can bid for. The cap will be applicable for public as well as private sector entities.

“A decision on commercial mining is yet to be taken…the Government is taking one step at a time,” the official told BusinessLine, adding that the first in priority are producing blocks (42, where work will come to a standstill from March 2015), and those ready to produce (32) with an annual output potential of 210 million tonnes.

For the first round of auction/allocations, the Coal Ministry has shortlisted 92 coal blocks. Of these, 18 blocks (potential: 100 million tonnes) that have been added subsequently to the initial list are awaiting environmental clearances and may miss the March 2015 target.

Following the Supreme Court verdict de-allocating 204 coal blocks, the Centre has decided to re-allocate the blocks in phases. There were 218 blocks allocated between 1993 and 2010, and under litigation. The Court has exempted 12 blocks awarded to ultra mega power projects and one each to SAIL and NTPC while de-allocating the rest.

Of the 218 blocks, 42 were given for commercial end-use, but are now de-allocated. Such blocks had geological reserves of 6.7 billion tonnes. The blocks were allocated to State Government-owned mineral development companies in Odisha, Jharkhand, Madhya Pradesh, West Bengal, Maharashtra and others. Of the 92 blocks to be auctioned or allocated to PSUs in the first phase, 59 have been fixed for the power sector – of these 25 blocks will be auctioned and 34 kept aside for Central and State PSUs.

Source: Business Line