The second tranche of the auctions for commercial coal mining is approaching its conclusion with the electronic round of bidding set to commence from 2 Aug ’21.
In a major contradiction to the initial trends, the auction process failed to garner adequate participation as no bids were received for 48 of the 67 coal blocks put up for sale.
Additionally, out of the remaining 19 blocks, only eight have qualified for the electronic round which had received multiple bids in the technical round.
Reflecting a decline in investor appetite for coal mining amid environmental concerns and lower margins, the number of blocks in contention for allocation has significantly reduced compared to the previous tranche. It may be recalled, in the previous tranche, a total of 19 blocks had entered the final electronic round of the auctions.
This comes after the coal ministry had offered the highest number of blocks in a particular tranche post-commencement of the auctions regime since 2014 in order to encourage higher participation.
Auction schedule
The current round of sales has witnessed selective preference for blocks with lower coal reserves. Interestingly, of the eight blocks, none has coal reserves of more than 250 million tonnes (mn t).
Out of the four coking coal blocks, only Jogeshwar and Khas Jogeshwar make the final cut which will be auctioned on day one along with Gondkhari and Jhingdor blocks.
Day two features sales of two blocks which will be followed by the auction of three blocks on the final day, including Burakhap Small Patch which had received the highest number of bids in the technical round.
What’s next?
After the electronic round of auctions, these eight blocks will be allocated to the successful bidders.
As far as the remaining 11 coal blocks with single technical bids are concerned, their fate will be decided through another re-sale attempt, which is expected to be initiated after the conclusion of the current round.
Leave a Reply