The government on June 18 had launched the maiden auction for coal blocks, where private players can participate without any end-use restrictions.
Responding to Maharashtra’s objection, the Centre has decided not to put up the Bander mine for commercial coal auctions.
“We are withdrawing the Bander mine in Maharashtra, which comes in an eco-sensitive zone,” Union coal minister Pralhad Joshi told FE. Also, the government is considering to replace four mines with 20 million tonne per annum (MTPA) capacity in Chhattisgarh at the state government’s request.
“In the spirit of co-operative federalism we want to take all state governments into confidence before taking action,” Joshi added, pointing out that “before doing this exercise, eight consultation rounds had taken place with the state government officials, including Jharkhand, Chhattisgarh, Odisha, Madhya Pradesh and Maharashtra”.
The government on June 18 had launched the maiden auction for coal blocks, where private players can participate without any end-use restrictions. This would also be the first set of coal assets to be auctioned off through the new market-determined revenue share model that replaced the fixed fee/tonne regime that turned off private investors.
Though the withdrawn Bander mine had a relatively smaller capacity of 2 MTPA, the blocks to be replaced in Chhattisgarh — Mogra South (6 MTPA), Mogra 2 (10 MTPA), Sayang (4 MTPA) and Madanpur North (4 MTPA) — were relatively larger, the kind investors are more attracted to. Among the mines offered, analysts expect fierce bidding for Odisha’s Chendipada (40 MTPA) and Macchakatta (30 MTPA) blocks and Chhattisgarh’s Gare Pelma IV/1 (6 MTPA) coal mine.
The government believes that companies will not face problems in procuring necessary clearances to start mining in the low and medium conservative zones. “For high conservative zones, where around 15 mines are located, there will be more restrictions and miners will have to fulfil the additional conditions to get clearances,” Joshi said. “However, permissions were given by earlier governments before 2014 for mining in high conservative zones as well,” the minister added.
The government expects positive industry response for the auctions as it believes it is offering attractive mines and also incentivising gasification, coal bed methane and liquefaction. “We have also eased norms, where miners can get back their upfront payments through adjustments in the premium they will have to pay to the government over 4-5 years,” Joshi said. Compared to the previous coal auctions held since 2015, after the Supreme Court had de-allocated 204 captive blocks, the initial response from the industry has been encouraging.
“Within a week of opening, 26 firms have already bought the tender documents which costs Rs 5 lakh and ten companies want to visit the proposed sites, Joshi said. The ministry has appointed KPMG to handhold companies for mine visits, documentation and other such procedures. “We are actively considering the idea of a coal regulator,” the minister said.