Next round of coal auction to have only small and medium-sized mines

The mines won't have legacy or legal issues as the Centre is trying to make the process as seamless as possible

The Ministry of Coal will offer only small and medium-sized mines in the second tranche of commercial coal mining auctions to attract new and small mining players. Most of the mines that would be on offer have been evaluated to ensure they do not fall in eco-sensitive zones, said officials.

These mines won’t have legacy or legal issues as the Centre is trying to make the process as seamless as possible, they said. The ministry has also decided to offer new mines apart from the ones in the original list of cancelled mines from 2014.

In the previous round, larger mines with annual production capacity of more than 10-15 million tonnes per annum (MTPA) did not elicit response from industry. The mines which were auctioned had peak rated capacity in the range of 0.3-10 MTPA.

“We used the decision support system (DSS) of the Ministry of Environment, Forests and Climate Change to identify forest cover near the mines. Those with thick forest cover and ones that are in eco-sensitive zones have been kept in abeyance. For now, we are offering small mines which do not have large land banks and forest cover,” said a senior official. DSS is a geographical information system which provides details of forest cover and ecology through satellite imagery. It also helps in monitoring project activity in that area.

In the first round of commercial coal auction, Maharashtra and Chhattisgarh had protested against some mines which were in eco-sensitive zones. One mine each from Maharashtra and Chhattisgarh were removed from the auction as they were near a tiger reserve and river bank, respectively.

The Centre allowed private companies to enter the arena of commercial mining and sale of coal — 47 years after coal mining was nationalised in India.

It amended the Coal Mines (Special Provisions) Act, 2015, in May to open coal auctions for non-mining, MSMEs and foreign companies. The two-part auction concluded in November where companies submitted bids for 19 of the 38 blocks on offer.

Among the winning bidders were Adani Enterprises, Hindalco, Vedanta, Essel Mining of the Aditya Birla Group, Jindal Steel & Power, and several new and non-mining companies such as Aurobindo Realty, Yazdani International, JMS Mining, and Boulder Stone Mart. Almost 65 per cent bidders were from the ‘non-end user’ category — not direct coal users. “As we are getting a lot of interest from small and medium-sized companies, we are now offering smaller mines. A lot of new players are entering coal mining so the effort by the government is to make it as seamless as possible,” said an official.

The Union coal ministry would also offer mines which were not part of the original list of 205 mines, whose allocation was cancelled by the Supreme Court. Officials said mines under the Coal Mines (Special Provisions) Act, 2015 and Mines and Minerals (Regulation and Development) Act, 1957 will be offered.

The list of mines on offer would be announced in the coming weeks. The auction would follow the same methodology as the first round.