E-auction for commercial coal mines likely in October, results in November

The online auction of coal blocks for commercial mining and sale for private companies will commence in October and final winners declared in November, said a government’s notice on Saturday. The Centre has also extended the deadline for various processes under the auction including a site visit, sale of tender documents, and submission of technical bids.

In a revised schedule shared on e-commerce portal of MSTC, the nominated authority for coal auction, the last date of submission of queries by bidders has been extended to September 11. The first deadline expired on July 23. In earlier comments submitted to the ministry of coal, several investors raised concerns about the timing of the auction citing Covid-19 as the dampener.

Several investors asked the government for a deferment of the auction process by three months, mentioning it will help bidders make an informed decision.

According to the new schedule, the due date for submitting a technical bid is September 29 and e-auction would be conducted during October-November. The last date for submission of the request for site visit has been extended to September 18. It was on July 15. The e-auction will start on October 19 and go on till November 9, 2020.

The auction is a two-part round — technical and financial. The nominated authority for the coal auctions — a joint secretary-level official from the Ministry of Coal — will evaluate the technical bids. Bidders will be required to submit their eligibility criteria, along with an initial offer to the nominated authority.

The Centre had started the coal mine auction — for commercial mining and sale by private companies — in June. Bidding terms were liberalised to attract foreign players, non-mining entities, and large miners. In May, it amended the Coal Mines Special Provisions Act, 2015, to simplify the auction process and attract significant investor interest.

Last week, the Centre decided to restrict the entry of neighbouring countries including China in commercial coal auction. Earlier, the Centre had permitted 100 per cent foreign direct investment (FDI) under the automatic route for coal mining activity, including associated processing infrastructure.