Auction coal blocks only after geological report: Crisil

Of the 54 mines to be allocated via auction, only 12 have been explored so far

The auction of 54 coal blocks may get delayed as Crisil appointed to suggest methodology for fixing reserve price for mines has recommended to the government that mines be put on offer only after they are fully explored and the geological report is obtained.

"Crisil during its discussions with Coal Ministry said that unless there is Geological Report (GR) of the blocks and they are fully explored they should not be put on offer," a top official in the Coal Ministry said.

Of the 54 coal mines identified to be allocated through auction route, only 12 have been explored so far. One mine would be explored this financial year and two in the next fiscal, Coal Secretary S K Srivastava had earlier said.

Financial service firm Crisil has already submitted a draft report on the methodology to determine the reserve price for bidding in the blocks.

Crisil has reportedly suggested preparation of a robust feasibility report of the blocks and usage of Discounted Cash Flow (DCF) method for valuation of the blocks.

Srivastava had also not given a time frame for conducting auction of these blocks. "It is very difficult at this time to indicate a specific timeline," he had said.

"There are issues which have long-term implications and these need more and more consultations. Right now we have advised Crisil to go and further consult two Ministries. We told them to go and consult Planning Commission with regard to pricing issue. We have also told them to consult MoEF (Ministry of Environment and Forests) whether in-principle clearances are possible or not," he had said.

The Coal Ministry has identified 54 new coal blocks for auction to the bidders for captive use in different sectors including 16 for power and 12 for steel.