India: Coal Ministry Invite Bids for Coal Mine Allotment

In exercise of the powers conferred by the coal mines (special provision) act, 2015, Coal Ministry under the government of India has directed the nominated authority to undertake the sixth and seventh trance of auction for allocating coal mines to the eligible companies.

The sixth tranche of auction will envisage allocation of mines to companies that are engaged in specified end use-Iron & Steel, Cement and Captive power plants. While the seventh tranche will be conducted for allocation of coal mines to the companies engaged especially in production of Iron and Steel.

Accordingly, bids are invited in digital format from eligible companies for short listing qualified bidders, which will then be allowed to participate in the e-auction process.

Interested and qualified bidders can register themselves on MSTC website. The last date for purchase of tender document after payment of a fee of INR 500,000 per mine is 26 Nov’18, while last date for submission of bids is 1400 Hrs on 28 Nov’18.

Low Response in Previous Auctions:

Allocation of coal mines provides an alternate source of fuel security to the companies which use coal as a primary source of energy for running their operations. However, the previous two tranche of coal mine auctions have not garnered fruitful response, which were ultimately terminated.

In the fourth tranche of auction, 9 coal mines were put for auction for the non-regulated sector, viz. iron and steel, cement and captive power plants. Due to the low response, online bids were not opened and the fourth tranche of auction was annulled.

In the fifth tranche, 6 coal mines were put for auction for the specified end use “production of iron and steel”. As there were less than 3 technically qualified bidders, that auction was also annulled.

Since the beginning of FY16, the Coal Ministry has managed auction of only two coal blocks namely, MarkiMangli-I and Majra located in the state of Maharashtra which were allocated to Topworth Urja and Metals Ltd. and Jaypee Cement Corporation Ltd. respectively.