State-run miner Coal India Ltd (CIL) has begun auction of closed/discontinued coal mines in an attempt to bring them back into operation. The sales commenced with the opening of technical bids.
Indicating a lukewarm response, 13 bids were received in the technical round for eight mines. On the other hand, auctions for the remaining eight mines stand cancelled due to non-receipt of bids.
It may be recalled that the company had identified 20 such mines that are spread across five subsidiaries, namely Eastern Coalfields Limited (ECL), Bharat Coking Coal Limited (BCCL), Central Coalfields Limited (CCL), South Eastern Coalfields Limited (SECL) and Western Coalfields Limited (WCL).
Of this, technical bid round for 16 mines was concluded by BCCL, SECL, WCL and CCL. Bids for ECL’s mines would be opened on 26 September, 2022.
Snapshot from technical round
* Three mines of SECL, two from CCL and BCCL and one from WCL fetched bids.
* Among the lot, Kharkharee and Bartunga Hill both received maximum of three bids, followed by two bids for Anjan Hill. Remaining mines fetched a single bid in the technical round.
* Sarda Energy, Shyam Sel and Vansar Constructions each have submitted two bids for the mines.
What’s next
The auction for sale of abandoned mines is based on two-part process: technical bid and price bid.
After the technical round, the bids would be evaluated post-which the price bid will be opened. The price bid comprises percentage revenue to be shared for the extracted coal, the floor percentage for which is set at 4%.
Bid evaluation would be based on the percentage revenue share and proposed coal production. The bidder with the highest product value would be considered as H-1 bidder.
The successful bidder would carry out mining on a mine-developer-operator (MDO) model for a period of 25 years or up to the proposed lifetime of the mine. Extractable reserves of the eight mines that received technical bids are assessed at around 181 mnt.
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