Notwithstanding a few last-minute hiccups caused by a clutch of court orders...
Notwithstanding a few last-minute hiccups caused by a clutch of court orders, the final round of auction for the coal blocks cancelled by the Supreme Court for irregularity in allocations kicked off on Saturday and the bidding proved to be aggressive.
Of the two blocks auctioned, the Sial Ghoghri block in Madhya Pradesh went to Anil Ambani-owned Reliance Cement for R1,402 crore/tonne, much higher than the staring price of R1,002 that was revealed when the bids of all technically qualified companies—Reliance Cement, Hindustan Zinc, OCL Iron and Steel—were opened in the morning.
As of press time, aggressive bidding was also on for the other block—Talabira I in Odisha—previously held by Aditya Birla group frim Hindalco Industries and is reserved for the power sector.
In this case, when the bids were opened, one bidder was found to have quoted zero (which means nil pass-through of fuel cost), giving the government the option of asking for more than the reserve price of R100/tonne and trigger forward bidding. The bid price hit R342 per tonne for the mine at the time of going to press, with Adani Power, Essar Power MP, GMR Chattisgarh Energy, OPG Power Generation, PKM Powergen and Sesa Sterlite in the fray.
As per the rules, coal blocks meant for unregulated sectors like cement undergoes forward bidding where the highest initial price offering is set as the floor price and the bidders are allowed to bid higher amounts till the highest offer is awarded the mine. Sial Ghoghri mine has a geological reserves of nearly 30 million tonne and was previously held by Prism Cements Limited.