Coal news and updates

India’s Coal Ministry has announced auctioning of 27 coal blocks alongside allocating 15 blocks to government companies under the preferential dispensation rules.

 

Stating the objective of the next round of auctions, the Coal Ministry said that of the 27 block to be put up for competitive bidding, 21 were set aside for end-use industries that were nonregulated, while another six were coking coal blocks reserved for exclusive bidding by companies in the iron and steel sector.

 

“At peak rated capacities, these 42 coal blocks would produce approximately 70-million tons a year,” the Ministry statement, said adding that the auctioning would be conducted on State-run MSTC (formerly Metal Scrap Trading Corporation) electronic platform.

 

Detailing the latest tranche of coal blocks to be allotted to government companies, Ministry official said that the sixth tranche would include five coal blocks identified for allotment to government companies for own consumption for power generation.

 

In the seventh tranche there would be eight coal blocks to be allotted to state and federal government run companies for production and free merchant sale of the dry fuel. The eight tranche one coal block would be allotted for own consumption for production of iron and steel.

 

According to the Coal Ministry, the process of allotment and auction of the coal blocks would commence this month starting with publication of notice inviting tenders (NIT) and entire process completed by November 2019.

 

The fresh round of coal block allotment and auction kick-started by the Coal Ministry needed to be viewed against the dismal record of achieving higher production since coal blocks started to be put up for auction some four years ago.

 

Over the last four years, 85 ready to produce coal mines had been auctioned by the government. But of these just three mines have been able to achieve their rated capacities, one has been able to stick to submitted mining plan and over six mines failing to achieve any kind of production at all over the last four years, government sources said.

 

The government has provisions to levy financial penalties on miners failing to achieve their mining plans submitted during signing of contract after successful bidding at auction with also the legal provision of forfeiture of bank guarantees, these measures seldom helped in rapidly increase domestic coal production, the primary objective of the government.

 

The collateral impact of failure to bring mines rapidly into production has been the rising coal import dependency. This reflected in government data which shows that Indian coal imports during first quarter of current financial year (April to June 2019) has surged 41% at 18.45-million tons, compared to corresponding quarter of previous financial year.

 

Source: miningweekly.com