The Ministry of Coal (MoC) has initiated sale of coal blocks for commercial mining under the sixth tranche of auctions by revealing the bids submitted by the interested bidders.
Indicating an unprecedented response, a total of 86 bids were received in the technical round, thus registering the highest count in the first attempt of sale. However, interest was elicited for only 32 out of the 133 blocks offered, throwing up a success rate of 24%, which remained comparatively low against the previous rounds.
Snapshot of Technical Round
Count of blocks include coal as well as lignite.
Out of these 32 blocks, two or more bids were received for 25 blocks. These blocks would eventually reach the financial bid round in accordance with the methodology defined for the auctions. The remaining seven blocks fetching a single bid each are expected to be considered for a second attempt of sale.
Interestingly, the ministry had also launched a second attempt of sale for eight blocks that had received a single bid in the fifth tranche. Of these, 10 bids were received against four blocks.
Key feature of sixth tranche
Based on commercial mining scheme, MoC is conducting sales of coal blocks on a regular basis with the aim to augment availability of domestic coal.
Under the sixth tranche, a record number of 133 blocks having a cumulative geological reserve of 67,396.17 mnt were put on sale. These include 71 new blocks while the remaining 62 were rolled over from the previous tranches.
Importantly, the new blocks were carved out of the existing ones by modifying the mine boundaries, thereby trimming the area surrounding dense habitation and critical infrastructure that posed a threat to mining activities. Besides, a few of the non-operational coal blocks surrendered by PSU companies were also included.
The objective was to revive the dwindling interest of bidders resulting from repeated offerings of the same unsold blocks under the rolling scheme of auctions.
In addition, the bidding process has been made lucrative this term by providing several financial relaxations involving payment of upfront amount and performance bank guarantee.
What’s next?
The technical bids received against the blocks would be examined and sorted based on ranking and elimination-based screening between 1-21 February, 2023.
After this the technically qualified bidders would take part in a financial bid round comprising forward ascending auction in terms of percentage (%) revenue share, starting from 22 February.
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