Big names bid for 3 coal-to-liquid blocks

Written by Anupama Airy | New Delhi, Jul 23 | Updated: Jul 24 2008, 08:35am hrs
The three coal blocks on offer for the multi-billion-dollar coal-to-liquid (CTL) projects have seen a rush of bids from public and private sectors. The ministry of coal has received 30 bids for the blocks that hold over 4 billion tonne of reserves, sufficient to fuel three CTL projects of $6-8 billion each.

The coal blocks on offer are the Ramchandi, the North of Arkhapal Srirampur and the Palabani, all in Orissa. Each block holds reserves 1 to 1.5 billion tonne.

Companies in the race includes Mukesh Ambanis Reliance Industries Ltd (RIL), Anil Ambanis Reliance Power Ltd (RPL), a consortium of Tata & South Africas Sasol, Essar Oil, GMR Infrastructure, JSW Steel Ltd, Jindal Steel & Power, Adani Enterprises, India Bulls, Steel Authority of India Ltd (SAIL), Indian Oil Corporation, GAIL (India) Ltd, Sterlite, Welspun, Vedanta Aluminium and Bhushan Steel, among others.

Sources said manyincluding RIL, RPL, the Tatas and the Jindalshave submitted multiple bids. The Anil Ambani group has, for instance, submitted two bids through Reliance Power and Reliance Infrastructure Ltd for all the three blocks. Similarly, Mukesh Ambanis RIL is reported to have submitted separate bids for each of the three blocks along with another bid for the three blocks combined. Jindal Steel & Power and the Tatas companies have also submitted multiple bids.

An inter-ministerial groupwith representations from the Planning Commission, ministries of finance, coal, commerce and petroleumis expected to shortly examine the proposals.

The Ambani brothers interest in the blocks is expected to open another round of controversy after the recent spat over Rcomms proposed merger with MTN.

The record high crude oil prices have kicked up the interest of energy companies in proven technologies like CTL. CTL is a process to convert fossil into liquid fuels such as petrol, diesel, naphtha, aviation turbine fuel and LPG. According to the ministry of coal estimates, coal reserves of about 1 to 1.5 billion tonne are required to produce 3.5 million tonne of oil and oil products. The block/cluster of blocks should enable mining operations of 28-31 million tonne of run-of-mine coal per annum for 30 years.