Coal Ministry receives 26 bids for auction of 11 mines.

The government has received 26 bids for the auction of 11 coal mines with 21 companies including JSW Steel, Jindal Steel & Power and Bharat Aluminium Company evincing interest. The coal mines Gare Palma IV/6, Utkal B1 & B2 as well as Chinora received the highest number of bids, Coal Ministry said recently.

“The process of the 4th tranche of auction of coal mines for sale of coal was launched by the Ministry of Coal on December 16, 2021. The last date of submission of technical bids was February 28, 2022. As part of the auction process, technical bids consisting of online and offline bid documents were opened on March 2, 2022 in the presence of the bidders,” Coal Ministry said in a statement.

The online bids were decrypted and opened electronically in the presence of the bidders, the ministry said, adding that the sealed envelopes containing offline bid documents were \opened in the presence of bidders. Entire process was displayed on the screen for the bidders. A total of 26 bids have been received (both online and offline) against 11 coal mines. Two or more bids have been received for 5 coal mines, it added.

While Gare Palma IV/6 received the highest 8 bids, the Utkal B1 & B2 mines received 6 bids and Chinora (Chandrapur, Maharashtra) received four bids.

Under the commercial coal mining auction process, a total of 42 coal mines have been successfully auctioned till date with a total cumulative PRC (peak rate capacity) of 86.404 million tonnes per annum (MTPA).

The ministry’s view is that a coal mine auction for the sale of coal would create a marketplace for the dry fuel with multiple producers to drive competition and adopt best practices in mining as well as environment management. Auction of coal mines for sale of coal in a transparent manner is expected to encourage transparent pricing of coal, based on market forces.

Demand for coal is higher than the current level of domestic supply of coal in the country. The gap between demand and domestic supply of coal cannot be bridged completely as there is insufficient availability and reserve of prime coking coal in the country. Besides, coal imported by power plants designed on imported coal and high grade coal required for blending purposes is also imported in the country as this cannot be fully substituted by domestic coal as the country has limited reserves of high grade coal.

In the current fiscal year, against the pro-rated demand of 439.37 MT by the Central Electricity Authority (CRA), up to January 26, 2022, CIL has already supplied coal to the tune of 432.90 MT.

The government has fixed a target of all India coal production of 1.2 billion tonnes up to 2023-24. Coal India (CIL) has envisaged a coal production programme of 1 billion tonnes from CIL mines.

CIL has planned to produce a quantity of 700 MT in FY23. Against the above planned production, the state-run miner is slated to supply 591.4 MT to the power sector in FY23 according to the projected demand given by the Ministry of Power.

HBL