You are here: Home » Markets » Commodities » Energy
Business Standard

Commercial mining: Steel cos stay away from bidding in coking coal blocks

No steel company has shown interest in bidding for four coking coal blocks of 38 mines put on auction for commercial mining as they have concerns about fuel quality and high capital cost

Topics
coal blocks | Steel companies | Commercial coal mining

Press Trust of India  |  Kolkata 

coal

No steel company has shown interest in bidding for four coking of 38 mines put on auction for commercial mining as they have concern about fuel quality and high capital cost, officials said on Friday.

Of the four blocks with coking coal, a key raw material for manufacturing of the metal, two received bids from companies which do not make steel, they said.

"did not show interest in bidding for the coking as the quality of the fuel from these mines is not very good and capital expenditure for mining is high.

"Availability of capex (capital expenditure) funds is also limited during the COVID-19 pandemic. Import is a viable option," an official of a steel company said on condition of anonymity.

He said, "The four mines were offered four times in the past for captive use but no steel makers had shown interest earlier. In this round, have not submitted bids."

The two coking coal mines that received bids are Brahamadiha in Jharkhand and Urtan in Madhya Pradesh, he claimed.

The government has in total put up for auction 38 for commercial mining.

As many as 42 companies have submitted 76 bids for 23 coal mines in the auction process. The coal ministry had said two or more bids were received for 19 coal mines.

"The government will go ahead with the 19 coal blocks for which two or more bids were submitted. The auctioning process has been annulled for the rest of the mines that received either one bid or nothing," another official said.

In the auction process, eight of 11 blocks in Madhya Pradesh received bids, while companies have shown their interest in six of nine coal mines in Jharkhand.

Firms submitted bids for five of Odisha's nine blocks put on for sale, while two of seven mines in Chhattisgarh attracted bidders. Maharashtra witnessed interest of companies for its two mines put on for auction.

In June, Prime Minister Narendra Modi launched the auction process for 41 coal blocks for commercial mining, a move that opens India's coal sector for private players, and termed it a major step in the direction of the country achieving self-reliance.

The coal ministry had later revised the list of mines to be auctioned for commercial mining to 38 instead of the 41 announced earlier.

The auction of coal blocks for commercial mining is expected to garner Rs 33,000 crore of capital investment over the next five to seven years.

Despite being the world's fourth-largest producer, India is the second-largest importer of the dry-fuel.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, October 02 2020. 17:43 IST
RECOMMENDED FOR YOU
.