Coal news and updates

Government holds back awarding 5 coal blocks from round II for examining low bids

The government has put on hold the award of five nonoperational coal blocks bagged by companies like Hindalco Industries, Jindal Steel & Power and Jaypee Cement at close to the ceiling prices during an auction last week. These blocks were part of the second round of auction.

Award of three producing blocks auctioned in round I has also been held back for similar reasons. A decision on those is likely to be made on Monday. On Saturday, the coal ministry declared the winners for eight of the 13 coal mines auctioned during March 4-9. "Bids for the remaining five blocks are being examined. E-auction for most of these mines closed at just Rs 2 per tonne more than ceiling price," a government official said.

The coal blocks whose final results were yet to be declared include the Tara mine in Chhattisgarh, for which the top bidder was Jindal Power at an offer of Rs 126 per tonne, while also agreeing to forego the mining cost that power producers are allowed to pass on to consumers. At this price, revenue to the state will be less compared with other blocks auctioned to power firms in the second round, the official said.

Other blocks whose awards are being held back are Brinda & Sasai ( Usha Martin), Meral ( Trimula Industries), Dumri (Hindalco) and Mandla South (Jaypee Cement). GMR Energy won the Ganeshpur coal mine at Rs 704 per tonne and Utkal-C was bagged by Monnet Ispat & Steel at Rs 770 a tonne. These companies also agreed to forego mining cost.

The coal ministry is already reviewing bidding of the three coal blocks remaining to be allotted from the first round: Gare Palma IV/2&3, for which Jindal Power was the top bidder; Gare Palma IV-1 (Bharat Aluminium) and Marki Mangli III (BS Ispat). An inter-ministerial committee, chaired by coal ministry additional secretary A K Bhalla, has placed its views on these three blocks to the ministry that is expected to announce its decision on the matter on Monday.

source: http://economictimes.indiatimes.com