Centre Launches Auction Process for 24 Coal Mines

  • The Central Government on 25.12.2014 kick-started the auction process for cancelled coal mines with the launch of a portal for electronic bidding for 24 coal blocks in the first tranche.
  • The Union Cabinet, on 24.12.2014, approved re-promulgation of the coal ordinance and necessary guidelines for mine allocations, a move that could make the kitty of coal-rich states fatter by Rs.7 lakh crore over the next 30 years.
  • Minister of State for Power, Coal and New and Renewable Energy, Piyush Goyal, while launching the portal for e-auction of 24 coal mines said:Entire auction process will be transparent, efficient and conducted online.
  • With this, the registration process has been started and interested bidders with end use plants could visit MSTC website for the purpose.
  • The registration process will be as per KYC norms
  • Mr. Goyal said the auction process would comprise techno-commercial bid for qualification and financial bid (e-auction) for selection of successful bidder.
  • Only 50 per cent of the qualified bidders from technical stage (subject to a minimum of 5 bidders) will be allowed to participate in the e-auction process.
  • It said mines set aside for iron and steel, cement and CPPs would be auctioned through ‘ascending forward auction’, where qualified bidders would quote incremental bids above the pre-determined floor price.
  • Mines to be allocated for power sector will be auctioned through ‘descending reverse auction’ to minimise impact on power tariffs of end-use plants.
  • Last date for receiving technical bids will be January 31, and list of qualified bidders will be placed on February 12,
  • e-auction of coal mines for qualified bidders would be held from February 14-22.
  • The entire mine allocation process for Schedule-II (42 producing mines) would be completed by March 23 with the signing of Coal Mine Development and Production Agreement.
  • It added that the second phase of auction for 32 mines would commence soon.
  • Mr. Goyal has said the auction and allotment would reduce imports and added that thermal coal import could also be brought down significantly and the government was aiming to eliminate it completely in the next 2-3 years.
  • The 24 mines for which auction process has started include 7 for the power sector, 16 for other end-use steel and cement plants as also captive power units, and one mine for steel.
  • Coal Secretary Anil Swarup had said the eastern States, as per conservative estimate, stand to gain Rs.7 lakh crore from auction and royalty over the next 30 years.
  • The auction follows the Supreme Court order in September that quashed allocation of 204 coal blocks to various firms since 1993.