Third round of coal auction sees 31 bids

The ten mines under auction were for the non-regulated sectors like cement, captive power plants

The third round of coal auctions has received 31 bids from top companies. Of the 10 mines put on the block, six mines had been offered in earlier rounds, too, but failed to attract enough bidders. This time only one  mine, Marki Mangli IV, failed to find any bidder. Along with state-owned Steel Authority of India (SAIL) and Rashtriya Ispat Nigam, private sector players such as Hindalco, Jindal Iron & Steel, Balco, Bhushan Power & Steel, ACC and Vedanta are also in the fray.

This round has been earmarked for the non-regulated sector comprising cement, iron & steel, and captive power plants. None of the 10 mines  will be given to power generating companies.

“Mines like Parbatpur Central which could not be sold earlier have received bids from industry majors like JSW Steel and SAIL,” said a government press release.

The 10 mines have a total of 858 million tonnes of geological reserves and 356 million tonnes of extractable reserves. These are located in Maharashtra, Jharkhand, Chhattisgarh and Odisha.

“Lloyd Steel and Topworth Urja, amongst others, have bid for Marki-Mangli-I. Jamkhani, which was withdrawn from the auction last time, has received the highest number of bids at six,” the press release noted. The Majra and Chitarpur coal mines have received six and five bids, respectively.

The tender process for this round started on June 8 with the release of documents. As part of the auction process, technical bids comprising online and offline bid documents were opened here on Monday, in the presence of the bidders. The final bidding will run from August 11 to 17.

Tweaking the rules of auction, the government has ruled out multiple bids this time. “Only one bid per end use plant (EUP) would be allowed. Multiple bids by a single EUP would be treated as one bid and the top 50 per cent bidders would be decided henceforth,” Anil Swarup, secretary, coal ministry, had said on June 4.

“We will in the end get a pool of users who are ready to pay a certain price for a specific amount of coal. The power sector is kept out because the tariff depends on the price of coal and we want to first discover the price of coal by auctioning it to the unregulated sector,” he said.

The government has decided on the eight other mines to be auctioned in the fourth round. In the first two rounds, 40 coal mines were awarded to both power and unregulated sector, unlocking revenue of Rs 2.85 lakh crore for a period of 30 years for mineral-rich states.

Swarup has already said the government will execute agreements with successful bidders of the third round by August 31.

COAL AUCTION: THIRD ROUND

• Only for unregulated – steel, cement, aluminium and captive power
• Agreement to be signed with winners  by 30 August
• Minor changes – single bid per end-use plant allowed. Multiple bids scrapped

* 10 Mines on sale
* 13.14 mt Cumulative annual production
* 31: Number of bids
* 11-17 Aug Auction to run

COMPANIES WHICH HAVE BID IN THIRD ROUND

JSW Steel, SAIL, Rashtriya Ispat Nigam, Hindalco, Jindal Iron and Steel, Balco, Bhushan Power and Steel, ACC and Vedanta.