Coal news and updates

Monnet Ispat to surrender Odisha coal block bagged in auction

Monnet Ispat & Energy will surrender a coal block in Odisha that it bagged for its power plant in the second round of coal auctions, the company told the Delhi High Court.

The company on Thursday urged the high court to direct the government to let it exit the Utkal-C coal block without paying any penalty or being blacklisted from future rounds of coal mine auctions, sources said. Monnet Ispat approached the court following the government's decision to put a ceiling on the fixed costs that a power plant can factor into electricity tariffs.

It argued that capping fixed costs after the auction of coal blocks amounted to ex-post facto change in bidding conditions of coal mines for power sector. The company has not yet approached the coal ministry formally for surrendering the mining project, sources said.

In a related case of Mandakini Exploration and Mining, a joint venture of Jindal India Thermal Power and Monnet Power, the Delhi High Court on Thursday asked the government to justify the rationale for capping fixed costs.

The court also asked the government how it can regulate costs in competitive tariff bidding provided under Section 63 of the Electricity Act. Section 62 of the Act provides for tariff regulation through the electricity regulator, while Section 63 provides for tariff discovery through competitive bidding.

The court will next hear both the cases on August 13.

source: http://economictimes.indiatimes.com