Coal news and updates

The first ever auction of coal blocks to the private sector is likely to take place in December as the Cabinet has already given its nod for the methodology for such an exercise to take place, Coal Minister Sriprakash Jaiswal said here on Friday.

 

Talking to reporters on the sidelines of the ‘Coal Summit’ organised by Confederation of Indian Industry (CII), Mr. Jaiswal said: “We are hopeful that the auction of coal blocks will begin in December. Everything is in place for the exercise to take place. We want that coal blocks explored to be allocated to the private sector and therefore it is taking time.”

It is understood that six explored blocks, with an estimated reserves of 2,000 million tonnes, will be auctioned in the first phase. The Cabinet had last month approved the methodology for auctioning coal blocks, providing for upfront and production-linked payments and benchmarking of coal sale prices. Coal blocks will be put for auction after the Environment Ministry reviews them and bidders have to agree to a minimum work programme. The policy aims at ensuring greater transparency and paving the way for the government to auction explored blocks.

 

The government had earlier allocated 14 coal mines to central and state public sector units, including four to NTPC, in July. It had planned to auction 54 coal blocks with total estimated reserves of about 18 billion tonnes.

 

In reply to another question, Mr. Jaiswal said it was for state-run Coal India Limited (CIL) to take a call on whether or not to buy back shares from the government. “The buyback of shares has to be decided by CIL board as we don’t have any role in it. The CIL board does not work or act according to our directions. The disinvestment in CIL will take place only after Cabinet's approval,’’ he added.

 

CIL was listed on bourses in 2010 after the government raised Rs.15,199 crore by selling 10 per cent stake in it. The company has a cash balance of about Rs.62,000 crore.

 

Mr. Jaiswal said that around 85 per cent fuel supply agreements (FSAs) have been signed and the remaining would also be done once the technical glitches were addressed. “The remaining FSAs will also be signed once those technical reasons are addressed,” he added.

 

Source: The Hindu