The auction of coal mines under the eighth, ninth and tenth round has come to an end with the significant variation in winning bid prices.
Vedanta Limited emerged as the highest winning bid amount from among all mines bid out, at Rs.1,674 per tonne, for the Jamkhani coal mine in Odisha whereas Prakash Industries emerged as the highest bidder for Bhaskarpara coal mine in Chhattisgarh with a bid out the price of Rs 1100 per tonne. Naveen Jindal-led Jindal Steel & Power (JSPL) emerged as the highest bidder for Gare Palma IV/1 coal block in Chhattisgarh with a bid price of Rs 230 per tonne.
Birla Corporation Limited has won two mines (Brahmapuri and Bikram) in these rounds. Powerplus Traders Private Limited, Jindal Steel And Power Limited, Prakash Industries Limited and Vedanta Limited have won one mine each.
Prakash Industries said that the coal from the Bhaskarpara mine will be used in the company’s Integrated Steel Plant at Champa in Chhattisgarh.
The Jamkhani coal mine will be handy for sustaining operations at Vedanta’s Jharsuguda aluminium smelter.
Commenting on the differences in winning bid price, Kameswara Rao, partner at PricewaterhouseCoopers (PwC) India said, “The bids are generally lower due to improved supply situation. The differences too are largely cost-reflective. The cost of underground mines and the smaller mines is high, and so the bids received are lower.”
The Ministry of Coal was able to auction six out of the 27 coal mines which it had intended to bid out in these three rounds. One of the reasons for disinterest in the rounds is because of the higher expectations from commercial coal mining, the auctions for which are projected to begin from December 2019. The Ministry of Coal is now planning to conduct another round of mine auctions with further ease in the bid guidelines.
