FM kicks off India’s largest coal mine auction
Finance Minister Nirmala Sitharaman on Thursday kicked off sixth round of coal mine auction – the country’s largest ever coal mine auction with 141 mines on the block across eleven states. As many as 133 coal mines were put up for auction, out of which 71 are new mines and 62 are rolling over from earlier tranches of commercial auctions, according to the ministry of coal. Additionally, eight coal mines under second attempt of fifth round of commercial auctions were included for which single bids were received in the first attempt.
While launching the auction, Finance Minister Nirmala Sitharaman said, “A fast growing economy like India needs greater investment in coal production and gasification projects. Globally, energy prices especially that of gas is going up. India is at present the best investment destination in the world. Due to policy consistency and transparent process of the government, coal imports for power sector have come down by 41%.”
“Twelve states will benefit directly from auctioning of 141 coal mines. Mining sector reforms are providing the right fillip to our fast growing economy. Finance Ministry will be extending all help for coal gasification and incentives in commercial mining, she further added,” Sitharaman added.
Coal and mines minister Pralhad Joshi said the ministry is exploring alternative methodology for enhanced use of coal. “Finance ministry has extended ₹6,000 crore incentive for coal gasification and ₹250 crore for exploration process. During the biggest auction undertaken so far, today 141 mines pertaining to eleven states have been auctioned,” Joshi said.
“Previously auctioned mines have started production and hoped that 10 to 15 million ton coal will be produced from new mines by next year,”Joshi added. As per a coal ministry review, it is anticipating 900 million ton coal production this year, Joshi said.
“Key features of the auction process include reduction in upfront amount and bid security amount, permission to relinquish part of the coal mine in case of partially explored coal mines, introduction of National Coal Index and National Lignite Index, ease of participation with no entry barriers, full flexibility in coal utilisation, optimized payment structures, incentives for early production, coal gasification and usage of clean coal technologies,” the coal ministry said in a release.
Meanwhile, the commencement of sale of tender document has started from November 03. “Details of the mines, auction terms, timelines etc. can be accessed on MSTC auction platform. The auction shall be held online through a transparent two stage process, on the basis of Percentage Revenue Share. SBI Capital Markets Limited, the sole Transaction Advisor to Ministry of Coal for the commercial coal mine auctions, had devised the methodology and is assisting the Ministry of Coal in conducting the auction process,” the ministry added.