Jindals, Hindalco bag one coal mine each in latest auctions

The Tara coal block in Chhattisgarh went to Jindal Power and the Dumri block in Jharkhand to Hindalco in the latest round of coal auctions held by the government on Saturday, officials said.

The third block on offer at the e-auction on Saturday, Nerad-Malegaon in Maharashtra, went to Indrajit Power. With this, the total commitment from around 20 blocks auctioned thus far under the second round is well over Rs.100,000 crore.

"Hindalco is highest bidder at Rs.2,127 (per tonne) for Dumri and Jindal Power at Rs.126 (per tonne) for Tara coal block," Coal Secretary Anil Swarup tweeted, as bidding ended. This final bid cost works out to Rs.9.800 crore for the Tara block and Rs.2,100 crore for Dumri.

Indrajit Power bid the highest for Nared Malegaon at Rs.660 per tonne.

Under the bidding process, participants are requred to submit an initial financial bid along with the technical details. On the actual date of the e-auction, the qualified bidder is permitted to anonymously submit as many final price offers as desired.

While the highest bid can be viewed, the name of the bidder will not be divulged. Each subsequent bid has to be made with an increment of Rs.2, within the notified start and the closing time. The successful bidder will then be immediately notified, thereafter.

The auction has a clause that extractable reserves of the allotted coal mine cannot exceed 150 percent of the annual coal requirement of the specified end-use plant over a period of 30 years.

As regards the payment, an upfront amount has been notified for each block. An amount of 50 percent of that is payable immediately, 25 percent upon the execution of the mining lease and the remaining upon the grant of mine opening permission.

The licencee shall also make monthly payments on the basis of the final price and it will have to be made within 20 days of the expiry of each month. There will also be an escalation in the price annually, based on a reference mechanism that will be published in the first week of April.