Coal news and updates

First batch of 24 coal mines e-auction on Dec 25

December 24: The Ministry of Coal will commence the first batch of the e-auction process for 24 operational coal mines from December 25 pursuant to the order of the Supreme Court and in line with the provisions of the Coal Mines (Special Provisions) Ordinance, 2014, Secretary (Coal) Anil Swarup said.

The ministry has decided not to put Marki-Mangli II mine for auction as it in “inviolate” areas identified by the Ministry of Environment & Forests (MoEF), Swarup said, while briefing the entire process.

Out of the 24 mines proposed to be auctioned, 7 will go to the power sector, 16 to other end-use plants or iron and steel, cement and CPP and 1 mine to the steel sector (coking coal), he said.

Two mines each, ie, 4 mines shall be auctioned together: Gotitoria East and West and Gare-Palma IV/2 and IV/3, Swarup added.

The Secretary (Coal) further stated that bidders with specified end-use plant are only permitted to participate in this auction.

“After own consumption, if there is any surplus coal, the successful bidder will be permitted to sell the surplus only to Coal India Ltd (CIL) at respective bid price or notified price for that specific grade of coal,” he said.

Registrations will commence on December 25, 2014 and interested bidders with end-use plants could visit the MSTC website for the purpose. The registration process will be as per KYC norms and will be available on the MSTC website, he said.

Explaining the process, Swarup said the entire auction process will be transparent, efficient and conducted online only.

However, 2 documents -- the bank guarantee (BG) comprising the bid security and an undertaking stating that all information submitted is true and correct shall be received in hard copy.

The auction process will comprise (i) A techno–commercial bid for qualification and (ii) A financial bid (e-auction) for selection of the successful bidder.

Only 50% of the qualified bidders from technical stage (subject to a minimum of 5 bidders) will be allowed to participate in the e-auction process.

Mines set aside for iron & steel, cement and CPPs will be auctioned through “ascending forward auction”, where qualified bidders will quote incremental bids above the pre-determined floor price.

Mines to be allocated to the power sector will be auctioned through “descending reverse auction” to minimise the impact on power tariffs of end-use plants. The last date for receiving the technical bids will be January 31, 2015 and a list of qualified bidders will be placed on the MSTC website on February 12, 2015.

E-auction of coal mines for qualified bidders will be held from February 14, 2015 to February 22, 2015. The entire mine allocation process for Schedule II coal mines will be completed by March 23, 2015 with the signing of the Coal Mine Development & Production Agreement and the Vesting Order, Swarup added.