Coal auctions: Jindal Power regains Gare Palma mine

By: |
November 5, 2020 6:30 AM

Jindal Power quoted the highest bid for Chhattisgarh’s Gare Palma IV/1 block, which was the largest mine to go under the hammer on Wednesday, by offering a revenue share of 25%.

The success of the auction is 50 per cent," he said.The success of the auction is 50 per cent," he said.

Four coal blocks were bid out to private players on Wednesday, and the largest of this — Gare Palma IV/1 mine in Chhattisgarh — went to Jindal Power. As in the first two days of the first phase of auctions undercommercial mining, aggressive bidding was seen in the case of smaller blocks, while larger peers also saw a good response.

The Gare Palma IV/1 mine, with an annual peak production capacities of 6 MT, earlier belonged to JPL’s parent firm Jindal Steel and Power. The Supreme Court in its September 2014 order cancelled licences of 204 captive coal blocks, including this one. It was auctioned off again in November 2019 where JSPL was the highest bidder, but the government subsequently cancelled the auction.

The coal block is located close to JSPL’s Raigarh steel plant and the Tamnar power plant in Chhattisgarh.

Jindal Power quoted the highest bid for Chhattisgarh’s Gare Palma IV/1 block, which was the largest mine to go under the hammer on Wednesday, by offering a revenue share of 25%.

Of 19 blocks to be transferred to commercial miners in this phase, between November 2-9, 13 have so far been auctioned off.

Kota-based Boulder Stone Mart grabbed Gotitoria east and west blocks in Madhya Pradesh by quoting a revenue share of 54%.

Companies such as Vedanta, Adani, Aditya Birla Group’s Hindalco Industries have won one mine each till date. JMS Mining, which had made the highest bid for the Urtan coal block on Monday, won the Urtan North coal block in Madhya Pradesh by offering a 9.5% revenue share on Wednesday.

“We expect to get the ownership of the mine this time and once it starts producing, we can cut our reliance on coal procured from Coal India,” VR Sharma, managing director, JSPL, told FE.

The Centre initially estimated commercial coal mining to contribute about Rs 20,000 crore annually to states as revenue and potentially save Rs 30,000 crore per annum by substituting thermal coal imports. However, the actual benefits seem to be much lower as the estimates were based on output from 41 mines with an annual peak production capacity of about 225 MT. While three of the blocks were removed from the list following the objections from Maharashtra and Chhattisgarh state governments, the Union coal ministry had received bids for only 23 coal mines out of the 38 blocks offered. Four mines received only one bid each, rendering them unqualified to be put up for auctions.

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