Coal news and updates

India examines coal mine bids amid reports of discrepancies

The coal ministry is re-examining winning bids for three of the 18 mines put up for auction last month, a government source said on Monday, after media reports of problems with the bidding process.

A list of successful bidders released by the government on Saturday omitted the three mines and several reports said questions had arisen over the bid price, leaving the newly launched system under a cloud ahead of more sales this month.

Jindal Steel and Power Ltd (JNSP.NS), steel maker BS Ispat and aluminium company Balco had won the bids for the three mines. Shares in Jindal Steel, controlled by billionaire Naveen Jindal, fell as much as 4 percent on Monday.

Jindal Steel said in a tweet on Feb. 19 it had won two adjoining coal blocks it had held previously, Gare Palma IV 2 and 3 in the eastern state of Chhattisgarh.

The Supreme Court ruled last September that the previous method of allocating mine concessions was illegal.

In the first mine auction set up by the government after that ruling, Jindal Steel offered to pay 108 rupees ($2) per tonne, the lowest winning bid among the six blocks meant for the power sector. Bids are based on estimated tonnage in the mines and quality of coal available.

Jindal Steel and Balco did not immediately respond to calls seeking comment. BS Ispat could not be reached.

The government source, who did not want to be named but is directly involved with the auction procress, declined to identify the companies whose bids were being looked at or comment on any discrepancies.

Coal Secretary Anil Swarup told business daily Financial Express that "there are some prima facie issues". He declined comment to Reuters.

Dipesh Dipu, a partner with Jenissi Management Consultants, said reassessing the bids after the end of the auction process would send the wrong signal to the market.

"Again there is a question mark over the efficacy of the whole auction process," Dipu said. "Next time people will not take it seriously. It's like going back to square one."

($1 = 61.8200 rupees)

source: http://in.reuters.com