Day 2 of the commercial coal mining auctions witnessed slight improvement as the coal blocks received floor prices that were comparatively higher than that seen on the first day of the auction.
However, the same intensity was missing in the final round of sale for Bhivkund coal block which was secured by Sunflag Iron and Steel at a nominal bid price of 9% against floor price of 8.5%.
The element of surprise came from the Rauta Closed Mine which has the least coal reserve of 7 million tonnes (mn t) among the lot of blocks in contention for the financial bid rounds.
Historically, buyers have shown greater interest in blocks with lesser coal reserves given the need for long-term capital investment in blocks with larger reserves amid uncertainty over the future of coal. And Rauta was no exception.
Bidding for the block was closed at a final price of 75.5% against floor price of 15%, which incidentally is the highest ever bid quoted for a block post-introduction of the revenue sharing model for auctions.
It is important to note that a total of four participants were in the fray, namely-Adhunik Power, South West Pinnacle Exploration, Shree Satya Mines and Shree Sai Urja. In the end, Shree Satya Mines emerged victorious after an intense round of bidding that lasted almost seven hours.
The current round of auctions has failed to garner adequate response similar to the previous tranche, as only eight blocks have entered the financial bid round. At the end of Day 2, auctions for five coal blocks have been concluded. The remaining blocks will undergo sale on the final day.
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