The Ministry of Coal (MoC) has launched the sixth tranche of auctions for sale of coal blocks under the commercial mining scheme, by putting an offer for 133 blocks–which is the highest in a single tranche.
The key feature of this round of sale has been the introduction of 71 new blocks while the remaining 62 were rolled over from the previous tranches.
This came after the recent tranches 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 fifth tranche, MoC had offered a total of 109 blocks of which 91 had already featured for sale, while only 18 were new. Eventually, only eight of them were sold in the financial bid round.
In order to incite bidder’s interest this term, new blocks were carved out of the existing ones by modifying the mine boundaries, where presence of dense habitation and critical infrastructure had posed a threat to mining activities. Besides, few of the non-operational coal blocks that were surrendered by PSU companies, have also been added to the list for the first time.
Apart from fresh sales of coal blocks under the sixth tranche, the ministry has separately initiated a second attempt of sale for eight blocks that had received single bid in the fifth tranche.
Financial relaxation
The commercial mining auctions are being carried out in an aggressive manner to expedite coal block allocation which would ultimately increase coal availability in the country.
The process is being executed through a two-stage bidding on the revenue sharing mechanism. Besides, several benefits such as full flexibility in coal utilization and incentives for early production and use of cleaner technologies, have been provided to promote participation from the private sector.
To further ease the financial burden on bidders, the ministry has decided to reduce the upfront and bid security amounts that are involved in the payment structure of the sale process. Plus, bidders would also be allowed to relinquish part of the coal mine in case these are partially explored.
Over the course of five tranches of auctions that have been held so far, a total of 64 coal blocks have been allocated to the successful bidders.
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