Coal auction to benefit poor states: Coal Secretary

New Delhi: With aggressive bidding for coal blocks likely to continue on the fourth day, the government on February 17 said that poor states would benefit from the auction. "Coal block auction gets underway on the fourth day," Coal Secretary Anil Swarup said in a tweet. He further tweeted, "windfall in offing. Poor states to reap harvest of coal block auctions."

The mines on sale on February 17 are Amelia (North) mine in Madhya Pradesh (power sector), Ardhagram mine in West Bengal and Chotia mine in Chhattisgarh — non-power sector. The 10 companies in the race for Amelia (North) mine are Adani Power, Bharat Aluminium Co Ltd (Balco), Essar Power M P Ltd, GMR Chhattisgarh Energy Ltd, GVK Power Goindwal Sahib Ltd, Jaiprakash Power Ventures, Jindal Power Ltd, JSW Energy Ltd, RattanIndia Power Ltd, Reliance Geothermal Power Pvt Ltd.

The five companies vying for Ardhagram coal mine are Easternrange Coal Mining Pvt Ltd, Monnet Ispat and Energy Ltd, OCL Iron & Steel Ltd, SS Natural Resources Pvt Ltd and Visa Steel Ltd. The technically qualified bidders for Chotia mines are Balco, Godawari Power & Ispat Ltd, Hindalco Industries, Prakash Industries, Rungta Mines and Ultratech Cement Ltd.

Amelia (North) mine has extractable reserves of 70.28 MT, Ardhagram has extractable reserves of 19.29 MT, Chotia mine has extractable reserves of 13.57 MT. On February 16, Jai Prakash Associates, Durgapur Projects and B S Ispat — had bagged one mine each, even as the government said that it expects more aggressive bidding for blocks as the mines were already producing.

After the Supreme Court cancelled allocation of 204 mines in September, the government decided to auction the blocks. It has put 19 blocks on sale in the first tranche. The last day for the auction of first lot of mine is February 22.

Comment:

In my point of view the statement given by the coal secretary is not convincing.For example recently Hindalco won Kathautia mine in Jharkhand by offering Rs 2,860 per tonne of coal. It means around RS 3 per kg,so we can estimate that the cost of electricity generated will increase thus companies will pass this cost to the end consumer.However it is still not clear that Hindalco will use it for steel or power.