As Jindal Steel and Power (JSPL) awaits government’s decision on mines held back for re-examination, company’s managing director & CEO Ravi Uppal told FE that a decision to re-auction these mines based on price differential with other mines was an unfair criterion to judge the auction and added that the government should stand by the auction process and its results.
Uppal said that the company lost out in the bidding process of at least 5 coal blocks, which include Mandakini, Jitpur and Utkal-C among others, due to aggressive bidding by other competitors. The company could only grab those mines, which came within the threshold price considered as viable by the firm, he added.
The company’s critique comes after the coal ministry held back 8 mines — 3 from schedule I and 5 from schedule III — for re-examination citing comparatively lower winning bid prices and shorter duration of the bidding process. Of these mines, operational block of Gare Palma IV 2&3 and near-operational mine Tara were won by JSPL. The winning bid for both the mines were the lowest among mines auctioned in respective phases.
“Both our mines in question have massive extractable reserves of over 150 million tonne which implied a more subdued bidding compared to smaller mines that tend to attract a lot of smaller companies ready to bid aggressive out of desperation for coal. Any comparison of bid prices for mines reserved for same end-use is thus patently unfair,” Uppal explained.
Uppal further said that the difference in prices and interest in coal block is due to difference in characteristic of each mine that peak rated capacity, gross calorific value, mining cost, number of competing plants in the vicinity and most importantly logistics to transport the coal to the end use plant from each mine.
In the second phase of auction, government had to withdraw several mines with large reserves as less than mandated number of bidders (minimum 3) submitted technical bids.