Coal news and updates

Power consumers to save Rs 69,311 crore due to negative coal block bids

Electricity consumers in the country are likely to benefit by about Rs 69,311 crore from a reduction in power tariffs following negative bidding for coal blocks, the power ministry said in a statement.

Of the 204 coal blocks cancelled by the Supreme Court, the government has so far auctioned and allotted 67 mines and blocks. The revenue likely to be generated from the auction and the allotment of these mines and blocks is about Rs 3.35 lakh crore.

In negative bidding, power producers seeking to win captive coal blocks forgo their right to pass on mining costs to consumers and instead agree to pay the government.

The government has allotted 20 blocks in Jharkhand, 14 in Chhattisgarh, 11 in West Bengal, nine in Maharashtra, seven in Odisha, five in Madhya Pradesh, and one in Telangana.

At the next auction in May, 11 blocks will be offered for the power sector and five for the non-power sector. The level of readiness of end-use plants for this auction will be less than in the previous round, although the percentage has not been decided, according to coal ministry officials. The auctioned blocks are likely to produce 500 million tonnes of coal by 2020, when Coal India's output is expected to touch 1 billion tonnes, they said.

Coal India's board of directors has cleared proposals targeting production of some 908 million tonnes. The company is identifying projects for another 100 million tonnes.

source: http://economictimes.indiatimes.com