Govt seen getting Rs 3,800 crore from Gare Palma mines

The recently auctioned Gare Palma IV/1 coal block is expected to fetch the government more than Rs 3,800 crore from 45 million tonne of fuel that can be extracted through it, once operation starts. On Monday, Jindal Steel and Power (JSPL) quoted the the highest bid of Rs 230 per tonne for the block against the reserve price of Rs 150 per tonne.

Apart from the quoted price, the state government would get around Rs 197 for every tonne of coal mined from the block through various royalties and cess. On top of that, Rs 400 per tonne would go to the GST compensation fund.
The coal block in Chhattisgarh, located 40 km from JSPL’s Raigarh steel plant, has the potential to produce 6 MT of fuel every year.

The block is earmarked for steel. However, the new government guidelines allow the winner to sell 25% of coal in the open market.