e-auction of 24 coal mines begins today

Girja Shankar Kaura

Tribune News Service

New Delhi, December 24

With the Union Cabinet clearing the re-promulgation of the coal ordinance, the unfinished process of coal block allocations will begin from tomorrow.

The auction process, for which the guidelines were approved by the Union Cabinet today along with the ordinance, would start with 24 mines tomorrow. This will include seven for the power sector, 16 for other end-use steel and cement plants as also captive power units, and one mine for steel.

“Twenty-four blocks are being put up for auctions in the first stage. The process will benefit the common man. Power tariff will not go up, I assure you, because in this case it will be reverse bidding, and tariffs will come down,” Coal and Power Minister Piyush Goyal said.

The regulated power sector will have reverse bidding with state miner Coal India’s price providing the upper limit, and the bidder with the lowest bid will be declared the winner.

Elaborating on the auction methodology, Coal Secretary Anil Swarup said for the unregulated end-use sectors like steel and cement, the highest bidder will win the blocks. While the floor price will be decided based on the formula for determining net intrinsic value of each block, it cannot go below a pre-determined Rs 150 per tonne.

The whole process will be conducted electronically and a web portal where prospective bidders can register themselves will go online on Thursday, Swarup said.

The auctions are to be held between February 14-22 next year and the execution of documents is to be completed by March 31.

Swarup said beyond this first lot of 41 mines, the government expects to start the process rolling for a total of 101 blocks by March 31. The remaining 203 mines would be processed thereafter.

Swarup further said bidders with specified end use plant would be the only one permitted to participate in this auction. After own consumption, if there is any surplus coal, the successful bidder will be permitted to sell the surplus coal only to CIL at respective bid price or notified price of CIL for that specific grade of coal.

Registrations will commence from tomorrow and interested bidders with end use plants could visit MSTC website for the purpose .The registration process will be as per KYC norms and will be available on MSTC website.

Swarup said the entire auction process will be transparent, efficient and conducted online only.