Adani Power outbids Jindal in first coal auction win

In phase-II of the auction, which began on Wednesday, private companies can bid for 11 about-to-produce mines

Adani Power made a debut in the second phase of coal e-auction by winning the Jitpur mine in Jharkhand for Rs 302 a tonne. It outbid Jindal Steel & Power, the earlier lessee, to win the block with an extractable capacity of 2.5 million tonnes. The mine has power generation as end-use.

This would be Adani’s first captive coal mine in the country. The private power producer has an installed capacity of 8,620 Mw.

The company has a coal project in Australia, which got $1-billion financing from State Bank of India in November last year.

The second phase of the coal e-auction, which started on Wednesday, has put 11 about-to-produce mines from schedule-III for private companies to bid for. It has five  blocks for end-use power generation and the rest for unregulated sectors — iron, steel and cement. Adani Group is also leading the pack in the auction with multiple bids per block, totalling 10, racing closely with the Jindal group’s 11 bids.

On the first day, outbidding another incumbent in the unregulated segment, JSW Steel won the Moitra mine in Jharkhand, at Rs 1,512 a tonne. The mine was formerly owned by Jayaswal Neco, which was also in the fray. The mine has an extractable capacity of 1.5 million tonnes per annum. Usha Martin won Brinda & Sasai block in Jharkhand with a extractable reserve of 25.4 million tonnes. The block went to Usha Martin for Rs 1,802 a tonne.

In the blocks kept for the power sector, there is reverse bidding. For the unregulated categories, there is forward bidding. However, if any bidder puts a zero-rupee bid, even the power sector goes into reverse bidding. This results in power rates getting cheaper by at least six paise per Rs 100 fall in the bid amount. The third block put for auction on Wednesday, Moitra in Jharkhand, saw an opening bid of Rs 1,004 a tonne.

The bidding was in process at the time of going to press.

The government is re-allocating the blocks cancelled by the Supreme Court.

The first phase on February 14 to 22 saw auctioning of 18 blocks, earning the respective state governments a cumulative  revenue of Rs  1.35 lakh-crore.