Government to auction 10 coal mines in Augusthttps://indianexpress.com/article/business/business-others/government-to-auction-10-coal-mines-in-august/

Government to auction 10 coal mines in August

The notice for auction will be issued on June 8 and the electronic auctions for them will be held from August 11 to August 17.

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The mechanism for bidding out mines for the unregulated sectors entails forward bidding mechanism in which the highest bidder gets the mine.

The coal ministry on Thursday said the third round of coal auctions for the unregulated sectors beginning August 11 will include 10 blocks .

These mines, which have extractable reserves of 356 million tonne (MT) have cumulative peak rated capacity of 13.47 million tonnes per annum. “We will treat multiple bids from one company as one bid when calculating the 50 per cent qualified bidders after the technical bid stage,” coal secretary Anil Swarup told reporters.

The mechanism for bidding out mines for the unregulated sectors entails forward bidding mechanism in which the highest bidder gets the mine. The blocks to be bid out include Marki Mangli-I, Kosar Dongargaon, Majra and Marki Mangli-IV in Maharashtra, Parbatpur-Central and Chitarpur in Jharkhand, Dongri Tal — II in Madhya Pradesh, Bhaskarpara and Sondiha in Chhattisgarh and Jamkhani in Odisha.

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The notice for auction will be issued on June 8 and the electronic auctions for them will be held from August 11 to August 17. Agreements will be signed with the winning bidders by August 31. The government has so far garnered over Rs 2 lakh crore by auctioning 29 blocks in two phases.

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According to Swarup, his ministry will treat multiple bids from one company as a single bid while calculating the 50 per cent qualified bidders after the technical bid stage. Unlike auctioning mines for the power sector, where the bidder quoting the minimum price walks away with the bid, in case of forward auctions, the highest bidder wins the mine. This is also because the prices of end products in these sectors are de-controlled and it cannot be ascertained how much benefits are being passed on to the end users.

The coal ministry is readying a policy to auction coal linkages to the unregulated sectors within a month, the coal secretary said. The Ministry has already put up the draft policy for stakeholders’ consultation. “There is a need for transparency for determining who should get the linkages and at what prices, as in the unregulated sector the consumer does not get the benefit of cheaper coal supply to these sectors,” Swarup said.

This is why the ministry has suggested that methodology for auction of the linkages should be supplier controlled ascending market clearing auction where the prices are increased till demand-supply equilibrium is established.

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