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Behind the auctions

Government has failed to reform the captive coal mine system

When the government auctions natural resources and unexpectedly high prices are paid, what does that mean for the health of the sector? Do companies feel flush with funds, or are they overpaying out of desperation? Is the government maximising current revenue at the cost of killing growth and future revenues? These are reasonable questions, and ones that must be asked in the light of the ongoing auction of coal mining rights, or "blocks". The auction follows the Supreme Court's cancellation of almost all coal mining licences awarded by the government since the early 1990s. Some ...