Coal users gain on govt's draft rules on auctions

Reuters Market Eye - Sesa Sterlite gains 3.2 percent, Hindalco Industries 2.7 percent, CESC 1 percent.

Coal ministry on Thursday released approach paper, seeking comments from public on rules for auctioning of coal mines.

The government has also constituted a panel, which will meets on Dec. 19, to discuss the draft rules.The Supreme Court scrapped all coal blocks allocated since 1993 after ruling the selective allocation process was arbitrary and illegal.

Rules put floor price for auctions at reasonable levels for companies, analysts say.

Sesa Sterlite may gain the most if it wins any block given it has large capacities without adequate fuel.

CESC may win back important blocks given proximity to the mine and weak competition, dealers say

Other miners and coal users also see positive rub-off.

Coal India up 2.2 percent, Gujarat Mineral Development Corp 7.6 percent, JSW Energy 5.1 percent.

($1 = 63.5150 rupees)

(Reporting by Abhishek Vishnoi)