Coal news and updates

Govt may not auction new mines till coal prices recupe

The Government of India is unlikely to offer new coal mines for auction until and unless there is improvement in coal demand and prices improve in international coal markets, indicating that it may not immediately pursue auction of coal linkages, a source in the Ministry of Coal told ICMW.

The government recently scrapped auction of nine coal mines, held in the last week of December 2015, as the bids were far below expectations, while there have been no development in the last few months in relation to auction of coal linkages despite an inter-ministerial committee (IMC) set up for the purpose in January 2014.

“There is no immediate possibility of offering new mines for auction as there appears to be no demand in view of continued softness in international coal prices and bleak prospects of revival in prices in the next many months,” the source said.

On the status of auction of coal linkages to non-regulated consumers, the source indicated that there is no update on the same.

“There is no update on linkage auction after the suggestions were made by stakeholders and it can well be assumed that the process is on hold,” the source added.

To a question, the source said that as of now only 10, of the total 67-odd mines auctioned and allotted in three tranches in 2015, were in operation.

“These 10 operational mines had produced around 8 million tons (mt) of coal between April and November, 2015,” the source added.

The source evaded a query on the status of court cases lodged by various allocatees of captive coal blocks for capping of fixed cost for block development, saying “Cases are being fought by the power ministry and uncertainty related to this might also have affected bidding in the fourth tranche of auction.”