Coal Ministry Concludes Second Round of Current Block Auction

Indian coal ministry has wrapped up the second round of current block auction, with financial bidding for all the 6 underlying coal mines drawn to a close.

The second round comprising of financial bidding started from 1 Nov’19, was concluded with the auction process of Jamkhani coal block which was the last mine scheduled in the list.

The six coal blocks were shared amongst Birla Corporation, JSPL, Prakash Industries, Powerplus Traders and Vedanta, with Birla getting a hand in two blocks. Apparently, all the blocks entering the second round were offered for specified use in Iron & Steel, Cement & Captive power plants.

Highest premium over the reserve price was received for Bhaskarpara coal block, which was secured by Prakash Industries. While the highest bid among the lot was recorded for Jamkhani coal block.

Incidentally, the Jamkhani block had witnessed most number of participants, with two out of the total seven bids arising from Vedanta. Ultimately, Vedanta had secured the mining rights for the block by quoting winning bid of INR 1674/MT, at a premium of 67% over reserve price.

Birla Corporation, on the other hand, had landed its two blocks- Bikram and Brahmapuri with relative ease, by quoting winning bids close to the reserve price.

Source: MSTC
Price in INR/MT

Although the current scheme of coal block sales envisaged under the 8th, 9th and 10th trance auction had garnered somewhat weaker response, wherein only 6 out of the earlier notified 27 mines were ultimately procured by the end-users. But, it would be regarded as the first auction to have witness allotment of blocks since FY16, remarkably the previous tranche of auctions (4th, 5th, 6th and 7th) were terminated.

Following the conclusion of second round, the nominated authority would recommend the successful bidders to the Coal Ministry, which will be proceeded by issuance of vesting order for the respective coal mines.