India: Government seeks stakeholders recommendation for coal block auctions

The Ministry of Coal (MoC) has invited recommendations from prospective bidders in order to finalise list of coal blocks to be considered for next tranche of commercial mining auctions. In this regard, a tentative list of 96 coal blocks comprising of new as well as old blocks that were already put for auction in previous tranches, have been floated for deliberations.

Introducing new blocks into the auction fray, the ministry has decided to include 15 non-operational mines that have been surrendered by PSU companies under the provision introduced by the cabinet committee. These cover the likes of Bhalumuda and Banai coal blocks that were earlier allocated to NTPC.

Besides, 13 coal blocks earmarked by the Geological Survey of India (GSI) which have been added — all of which are partially explored. That apart, the list features 55 coal blocks that were rolled-over from previous auctions unaltered, while for remaining blocks, minor modifications have been made with respect to mining area before putting them for consideration.

Efforts made to increase allocation

MoC had introduced commercial mining auctions with an objective to augment production from the vast reserves available in the country by providing the participants freedom on coal utilisation.

However, the recent tranches of auctions have received dwindling response from the participants. One of the major reasons being the same coal blocks were repeatedly put on sale under the rolling scheme of auctions.

In the recently concluded fifth tranche, the ministry had offered a total of 100 coal blocks, but only 9 of them were new, while rest were rolled over from the previous tranches. Eventually, bid came in only for 15 blocks in the technical round, of which eight were auctioned in the final round that had received more than two bids.

The recent development indicates the effort made by the ministry in finding the right mix of blocks to be put on sale, so that there is a better chance of getting them picked-up by the prospective bidder.

So far, 56 coal blocks have been allocated over the course of five tranches, with only few of them starting commercial operations. MoC has estimated coal production of 54 million tonnes (mnt) from commercial blocks by FY32.