Coal-mining states to be richer by Rs 71,000 cr

Sector majors grab rich coal blocks at historic prices, again

The second phase of the e-auction of 11 coal mines proved to be a bonanza for mineral-rich states, whose revenues increased to Rs 2.05 lakh crore from Rs 1.35 lakh crore in the first phase. Out of the received bids worth Rs 71,027 crore for 30 years (mines' life), Rs 59,736 crore is towards royalty and the rest is the auction amount.

The second phase was almost similar to the first with sector majors grabbing richer coal blocks at high price. The only exception was Jindal with the lowest bid to get a rich coal block with power generation as end-use. While operational coal blocks were auctioned in the first phase, the second phase auctioned off about-to-produce mines.

The fourth and the last day witnessed Jaypee Cement winning Mandla South in Madhya Pradesh for Rs 1,852 a tonne. This will fetch the state Rs 55.2 crore a year as auction proceeds. Gujarat Ambuja Cement won Gare Palma-IV/8 at a new high bid of Rs 2,291 a tonne.

This round of auction gave India's largest private power producer, Adani Power, its first domestic captive coal mine in Jharkhand. Adani paid Rs 302 a tonne, outbidding incumbent Jindal Steel & Power.

If any bidder puts a Rs 0 bid, then reverse bidding would kick in. This will help power tariff go cheaper by at least 6 paise per Rs 100 fall in coal bid amount.

Hindalco quoted Rs 2,127 a tonne to grab the Dumri block in Jharkhand for iron, steel and cement sectors. Some coal blocks were dropped from auction.

Among these, Utkal B1& B2 in Odisha were embroiled in court cases filed by the mines' former owner Jindal Steel & Power. Rohne in Jharkhand was dropped as there are no environment clearances. Durgapur II coal block in Chhattisgarh had under-construction airport over the land of the mine, about to be commissioned in April 2015.

The first phase, which ran from February 14 to 22 saw auctioning of 18 blocks earning the respective state governments cumulative revenue of Rs 1.35 lakh crore. The second phase started from March 4 and ended on Sunday.