Coal news and updates

Coal miners pay penalty of ₹6,000 cr to qualify for e-auction bid

The 17-odd coal miners, including Hindalco, have paid a penalty of ₹6,108 crore to become eligible for participation in the e-auctions of blocks. The penalty is, however, lower than the earlier projections of about ₹10,000 crore.

To qualify as bidders in the e-auctions of the 42 producing blocks, the miners had to meet the Supreme Court’s September 2014 directive that the prior allocattees have to deposit an additional levy of ₹295 a tonne for coal mined till December 31. The 42 blocks were de-allocated from March 31, 2015.

“This ends murmurs that the companies may not come forward to participate in the coal blocks auction based on their earlier experience,” a senior official said. Hindalco has paid ₹566 crore.
Output projections

Minister for Power, Coal, New & Renewable Energy Piyush Goyal had told the Lok Sabha in December that the penalty from prior allocatees of the blocks would be ₹10,494.36 crore.

The calculation was done based on the miners’ output projections. In fact, imposition of penalty had generated a debate on whether these miners will continue to extract coal from the blocks de-allocated following the Supreme Court verdict, allowing the companies to mine till the end of fiscal 2015. Industry trackers had said that the miners had cut down their output, in fact some had also stopped mining completely.

Jindal Steel and Power Ltd has paid ₹3,089.24 crore (₹1,989.83 by JSPL and ₹1,099.41 crore by Jindal Power Ltd), while Prakash Industries has deposited ₹234.22 crore with the Coal Controller in the Ministry of Coal. In late December, the Centre opened registration for bidders interested in the first phase of e-auction – 24 blocks to be auctioned and 17 to be allocated to State and Central public sector units.

By January 31, 2015 bidders need to send in a technical bid with a price offer for qualification. Only half of the qualified bidders (subject to a minimum of five bidders) will then be allowed to participate in the financial bid stage.

The list of qualified bidders will be placed on the MSTC website on February 12 with the e-auction taking place between February 14 and February 22. The Coal Ministry expects to conclude the process by March 23.

Source: The Hindu BusinessLine