Adani Enterprises Ltd, among others, has bid for coal mines on the third day of auctions for commercial mining on Wednesday. Three coal mines have been put up for sale today.
“Adani Enterprises is vying for Gare Palma 4/1 in Chattisgarh and Urtan North in Madhya Pradesh,” said a person aware of the development requesting anonymity.
This two-stage auction process follows a decision taken by the Cabinet Committee on Economic Affairs in May to award coal and lignite blocks on a revenue-sharing basis. A bidder has to bid for the percentage revenue share over the reserve price.
Winning bids, on the first two days of auctions, were placed for nine coal mines by firms such as Vedanta Ltd, Hindalco Industries Ltd, Adani Enterprises, Aurobindo Realty and Infrastructure Pvt Ltd, Adani Enterprises Ltd, Andhra Pradesh Mineral Development Corp. Ltd and EMIL Mines and Minerals Resources Ltd, among others.
A total of 38 coal mines have been put up for auction by the coal ministry. There have been 76 bids from 42 companies for 23 coal mines, with the remaining 15 mines failing to get any offers. Jindal Power Ltd is among the companies that have bid for the mines.
“The e-auction witnessed strong competition amongst the bidders with all mines attracting good premiums over the reserve price,” the coal ministry said in a statement on Tuesday, which marked the second day of commercial coal mine auctions for four blocks having a total geological reserve of 1085.57 million tonnes.
India’s coal requirement is expected to go up to 1,123 million tonnes (mt) by 2023 from the current 700 mt. The earlier plan was to mine 1.5 billion tonnes of coal by 2020. Of this, 1 billion tonnes was to come from state-run Coal India Ltd and 500 million tonnes from non-Coal India sources in line with the government’s push to raise natural resources production and kickstart economic growth.
“Glad to note that day 2 of auctions for commercial coal mining has witnessed record offerings from bidders,” Pralhad Joshi, coal minister said in a tweet on Tuesday.
“Almost 42% premium was offered today, proving that our national resources have been put to best use,” Joshi added in his tweet.
Monday was the first day of auctions for five coal mines with a geological reserve of 572.18 million tonnes.
India’s push to raise production of natural resources to revive economic growth also comes at a time when the window for fossil fuels is closing and the global energy landscape is evolving. India on its part has called for a reset on climate debate on coal as a fuel, in the backdrop of it becoming one of the top renewable energy producers globally with ambitious capacity expansion plans.
There will be no restriction on the sale and utilization of coal from these mines. Earlier, blocks were awarded on a fixed payment per tonne basis and the government believes that this was impeding the use of the resource.
The government has been trying to raise India’s coal output. In 2018, it allowed commercial mining by private entities. The government had approved the promulgation of the Mineral Laws (Amendment) Ordinance, 2020, to attract investment in coal mining. It allowed coal mining by any company that is present in sectors other than steel and power and did away with the captive end-use criteria.
