New Delhi: Union Finance Minister Nirmala Sitaraman on Thursday launched the biggest-ever coal mine auction of 141 mines spread across 11 States in India.
The mines being auctioned are spread across coal and lignite-bearing states of Jharkhand, Chhattisgarh, Odisha, Madhya Pradesh, Maharashtra, West Bengal, Andhra Pradesh, Telangana, Rajasthan, Tamil Nadu, and Bihar.
Launching the 6th round of coal mine auction of the Ministry of Coal, Sitaraman highlighted that India is at present the best investment destination in the world. “Due to policy consistency and transparent process of the present Government, coal imports for the power sector have come down by 41 percent. 12 states are to benefit directly from today’s auctioning of 141 coal mines,” she said.
Complementing the Coal Ministry for the recent initiatives to unlock the coal sector, Sitharaman said that mining sector reforms are providing the right fillip to our fast-growing economy. “Finance Ministry will be extending all help for coal gasification and incentives in commercial mining,” she further added.
Addressing the function, Coal, Mines & Parliamentary Affairs Minister, Pralhad Joshi said that the Coal Ministry is exploring alternative methodologies for enhanced use of coal.
“The finance ministry has extended Rs 6000 crore incentive for coal gasification and Rs 250 crore for exploration process. During the biggest auction undertaken so far, today 141 mines pertaining to eleven states have been auctioned,” he said.
He said that previously auctioned mines have started production and hoped that 10 to 15 million tons of coal will be produced from new mines by next year. As per the review done the other day, the Ministry of Coal is anticipating 900 million tons of coal production this year, Joshi said.
133 coal mines were put up for auction in the 6th round of commercial auctions, out of which 71 are new coal mines and 62 coal mines are rolling over from earlier tranches of commercial auctions. Additionally, 8 coal mines under the 2nd attempt of the 5th round of commercial auctions were included for which single bids were received in the first attempt.
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Mines falling under protected areas, wildlife sanctuaries, critical habitats, having forest cover greater than 40 percent, heavily built-up areas, etc. have been excluded. The block boundaries of some of the coal mines where there was the presence of dense habitation, high green cover or critical infrastructure, etc. have been modified based on comments received during stakeholder consultations to enhance bidders’ interest and participation in these coal blocks.
Key features of the auction process include a reduction in the upfront amount and bid security amount, permission to relinquish part of the coal mine in case of partially explored coal mines, introduction of the National Coal Index and National Lignite Index, ease of participation with no entry barriers, full flexibility in coal utilization, optimized payment structures, incentives for early production, coal gasification and usage of clean coal technologies.
The commencement of the sale of tender documents started on Thursday. The Ministry has provided the details of the mines, auction terms, timelines, etc. on the MSTC auction platform.
Government officials said that the auction shall be held online through a transparent two-stage process, on the basis of percentage revenue share. SBI Capital Markets Limited, the sole transaction advisor to the Ministry of Coal for commercial coal mine auctions, had devised the methodology and is assisting the Ministry of Coal in conducting the auction process.
