The auction of 19 coal mines for commercial sale concluded today with the highest bid placed for Gare Palma 4/7 at 66.75 percent from Sarda Energy and Minerals, where the floor price was set at 44 percent.
The coal mine has a reserve of 239 million tonnes (MT) and 1.2 million tonnes per annum capacity. The Gare Palma 4/7 coal mine situated in Chhattisgarh attracted aggressive bidding and also ended later as it is an operational mine close to most of the bidder's plants. The bidders included companies like Adani, JSPL, JSW, Hindalco, Balco amongst others.
19 coal mines auctioned for the first commercial coal mining is expected to garner a revenue of over Rs 7,000 crore annually. The Aditya Birla group companies placed maximum highest bids for 3 coal mines, followed by 2 mines each were bid highest by Adani group companies, and 2 new players - JMS Mining and Aurobindo realty and infra. Vedanta and JSPL have placed the highest bids for just one coal mine each. Commercial coal auction is based on revenue sharing formula, interestingly the smaller mines with new bidders saw more aggression on bids than the bigger coal mines and the companies.
Finance Minister Nirmala Sitharaman in May announced the auction of 50 coal mines under commercial coal auction to make India an 'Aatma Nirbhar' economy. The move was brought in to curb coal import and enhance the production of coal and bring in investments and generate employment.
The rules of commercial mining now allow private sector investment with relaxation on entry barriers, net worth, and technical parameters, under a revenue-sharing model. Under the revenue-sharing model, miners will have to share a percentage of revenue with states as against the earlier regime of rupees per tonne basis auction which was conducted irrespective of the market price of coal.
The government offered 38 coal mines for commercial coal auction but interest received from companies for only 19 mines. The nominated authority on coal auction will submit its recommendation on successful bidders by November 11 to the government.
(Edited by : Abhishek Jha)
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