Auction of coal mines to private companies for commercial mining was conducted for the first time ever on Monday. In the e-auction, both large and small companies won coal mines of different capacities. Vedanta Limited got one of the largest mines - Radhikapur (6 million tonne per annum) in Odisha and Hindalco Industries was the highest bidder for the Chakla mine in Jharkhand. The highest bid of the day was made by a fairly new entrant Hyderabad-based real estate player Aurobindo Realty and Infra which quoted a 30.75 per cent premium on the revenue share to grab Takli-Jena-Bellora (North and South) mine in Maharashtra.
One of the smallest mines on offer on the first day, Marki Mangli-II in Maharashtra (0.3 million tonne per annum), saw a winning bid from Yazdani
International, a Bhubaneshwar-based metal and mining exporter. It quoted 30.75 per cent premium over the revenue share.
According to the auction methodology, the bid parameter is on ‘revenue-share’ mode. The participants bid for a percentage share of revenue payable to the state government from the production and sale of mined coal. The floor price is kept at 4 per cent of revenue share. Bidders place bids in multiples of 0.5 per cent of revenue share till it reaches 10 per cent and thereafter in multiples of 0.25 per cent of revenue share.
The price of coal extracted will be determined through the National Coal Index (NCI), which the Ministry of Coal will set up. For the first time, the Centre is awarding coal mines for commercial mining and sale to private companies. It amended the Coal Mines (Special Provisions) Act, 2015, in May, simplifying the auction process to attract non-mining companies and foreign players.
The technical round, under which the companies submitted their eligibility and the initial price offer, closed last month. Of the 38 coal blocks offered by the Ministry of Coal, it received interest from 46 companies for 19 blocks. The total number of bids submitted was 82.
In the financial bid round, the initial offers of technically qualified bidders were ranked in descending order for the determination of qualified bidders. These qualified bidders then participated in the e-auction. (Source: Business Standard)
