NEW DELHI: New entrants dazzled by offering more than 30 per cent premium and Vedanta Ltd grabbed the largestcoalblock on offer, while Adani Enterprises drew a blank in the first-ever auction of mines to private companies for commercial mining that began on Monday.
Altogether five blocks were on offer on the first day of the auction. Vedanta won the Radhikapur West block in Odisha quoting 21 per cent revenue share for the mine with estimated reserves of about 270 million tonnes. Aditya Birla group company Hindalco grabbed the Chakla coal block in Jharkhand by offering 14.25 per cent revenue share. The mine has estimated reserves of more than 50 million tonnes.
Adani Enterprises was in the race for both these mines but failed to get any. It had submitted technical bids for 12 of the 38 blocks on offer.
Debutant Aurobindo Realty and Infra from Hyderabad stole the show by offering the highest premium at 30.75 per cent to pick up Takli-Jena-Bellora (North and South) mine in Maharashtra with estimated reserves of 70 million tonnes.
Bhubaneswar-based metals and mining exporter Yazdani International bagged the Marki Mangli-II block in Maharashtra with estimated reserves of 11.5 million tonne reserves. Kolkata-based underground mining services company JMS Mining successfully bid for the Urtan block in Madhya Pradesh with reserves of 69.8 million tonnes.
The blocs are being offered under a revenue-share regime under which the bidder offering the highest share of the revenue from the sale of coal wins a block. The floor price has been kept at 4 per cent of revenue share. Bidders place bids in multiples of 0.5 per cent of revenue share till they reach 10 per cent. Thereafter, bids are placed in multiples of 0.25 per cent of revenue share.
The coal ministry had last month received 78 valid technical bids for 21 of the 38 coal mines offered in the first auction, a key component of the Rs 20-lakh crore stimulus. Hindalco and Essel Mining, the Adani group, Vedanta group company BALCO, Jindal Steel and Power and JSW were among the 46 entities to have put in technical bids. Four bids were disqualified on technical grounds.
Finance minister Nirmala Sitharaman had on May 16 announced the launch of commercial mining without end-use restrictions as part of the ‘Atmanirbhar Bharat (self-reliant India)’ campaign aimed at reviving economic activities across industries. The policy to allow commercial mining was approved by the cabinet in February 2017 under Narendra Modi’s first term as the prime minister. The changes in the pertinent laws required to implement the policy were made in January this year.
Prime Minister Narendra Modi launched the auction on June 18, saying it will usher in an era of competition and transparency in the sector and see India turning the COVID-19 pandemic into an opportunity. Altogether, 41 coal mines have been put on the block, which he said will attract investments of Rs 33,000 crore over the next five years and take the country towards self-reliance in energy. Four blocks were subsequently knocked off the list due to environmental concerns.
For good measure, the Prime Minister had said the auction will unlock the potential of India’s coal reserves, the fourth largest in the world, and curb imports. “Govt has taken an important decision to open up coal mining sector to competition, capital and technology. India should be the world’s biggest coal exporter, considering the size of reserves,” he had said.