Coal news and updates

MoC finally invites application to auction three coal blocks

February 27: The Ministry of Coal (MoC), on February 26, finally invited applications from bidders to auction three coal blocks – one each to steel, sponge iron and cement sector companies – through the competitive bidding route.

The ministry had been working on offering coal blocks to private sector companies through competitive bidding for almost a year now.

On February 13, ICMW had reported, quoting Minister of Coal Sriprakash Jaiswal, that the government is expected to hold the auction of new captive coal blocks by March 2014.

"Coal block auctions will be held in another month," the minister had said on the sidelines of the inauguration of the 5Th Asian Mining Congress in Kolkata.

The ministry floated a notice inviting applications (NIA) for allocation of areas containing coal through auction by competitive bidding for specified end-use or uses.

The NIA has been floated with a view to improving the long-term coal availability in the country.

Following are the details of blocks offered for auction by competitive bidding for mining to companies engaged in production of steel, cement and sponge iron:

The request for proposal (RFP) document for each block is available for purchase with immediate effect till May 27, 2014 upon payment of Rs 200,000.

As per the NIA, there would be a floor price for bidding, which shall be in rupee terms per ton and the bidders are required to bid above the indicated floor price.

The preferred bidder will be required to make an upfront payment upon signing of the Coal Mine Development & Production Agreement, which shall be non-refundable.

Explaining the steps involved in the bidding process, the NIA said a pre-bid conference will be organised on March 28 to clarify on the queries of prospective bidders.

The bids will first be evaluated for responsiveness – to ensure all required documents have been submitted as specified in the RFP, it said, adding, the bidders that meet the responsiveness check will be further evaluated for meeting the qualifying norms as specified in the RFP.

The NIA said that price offers of only the qualified bidders will be opened and that has to be in the form of a Rs/ton payment to the government.

The qualified bidder that has quoted the highest Rs/ ton will be the preferred bidder who will be issued a Letter of Award (LoA) by the Ministry of Coal and the qualified bidder will be required to sign the Coal Mine Development and Production Agreements within 45 days of the issuance of the LoA.