2nd tranche auctions for commercial coal mining biggest ever offer of coal mines in the country: Additional Coal Secretary, GoI

#CoalMines #Auction

Source: FICCI

● Govt offering 67 mines with a total resource of almost 36 bn and explored mines PRCs of about 150 million tonnes in the 2nd tranche auctions of coal mines.

Mr M Nagaraju, Additional Secretary & Nominated Authority, Ministry of Coal, Govt of India, today said, "We are offering 67 mines with a total resource of almost 36 bn and explored mines PRCs of about 150 million tonnes (mt) in the second tranche auctions of coal mines for commercial mining. This is the biggest ever offer of coal mines in the country."

Addressing the '1st Stakeholders' Consultation on 2nd Tranche of Auction of Coal Mines for Commercial Mining,' organized by Ministry of Coal, jointly with FICCI, Mr Nagaraju said, "The offers, which are in almost all coal-bearing states, give great opportunity and chance to the industry to pick the relevant and useful mines depending on their requirements."

Assuring the industry of providing all support, Mr Nagaraju said, "From this ongoing tranche of auction, Ministry of Coal is moving to a rolling auction mechanism wherein any un-auctioned mine shall remain available for auction on the portal, with more mines being added as and when available."

Mr Manoj Kumar, CMD, CMPDIL & WCL, said that there are 67 coal blocks in this tranche- 23 of which are CMSP and 44 are MMDR blocks; 37 are fully explored, while remaining 30 are partially or regionally explored.

Mr Dilip Chenoy, Secretary General, FICCI said that the second tranche auctions of commercial coal mines are an important step towards the commitment of increasing the availability of coal across the different segments of the industries and reducing the burden on coal imports.

"Initiatives taken by the Ministry of Coal for ensuring environment-friendly & sustainable mining, adoption of cutting-edge technologies, including coal gasification and CBM projects will help in ensuring sustainable growth in this endeavour," Mr Chenoy added.

After commercial coal mining auction process was initiated last year on 18 June through a high-level launch event jointly organized by Ministry of Coal, Govt of India, and FICCI, the second tranche auction is expected to bring in global best practices which will lead to development of a vibrant coal market, boosting economic growth and employment generation in the country.

The second tranche auction process was formally launched by Union Minister of Coal, Mines & Parliamentary Affairs, Mr Pralhad Joshi and Mr Amitabh Kant, CEO, NITI Aayog in the presence of senior officials from Ministry of Coal, key dignitaries and promoters from mining sector, industry associations on 25 March 2021. Following up with the pre-bid meeting held on 26 April, Ministry of Coal is organising a series of two stakeholder consultation under the aegis of FICCI for wider outreach to potential bidders. SBI Capital Markets Limited, a subsidiary of State Bank of India, is the Transaction Advisor to the Nominated Authority for the auction process.

The stakeholder consultation saw participation of leading players from coal and mining business, equipment manufacturers, mine developers and operators (MDOs) and financial institutions.

The auction shall be held online through a transparent two-stage process. Key highlights of this auction process are - market linked mechanism wherein bidding shall be based on Percentage Revenue Share, National Coal Index linked payments, ease in participation with no restriction for prior coal mining experience, optimized payment structures, efficiency promotion through incentives for early production and use of clean technology, flexible operating terms etc.

It is also expected that the rolling auction mechanism will expedite the allocation process of coal mines, bringing in greater transparency, ensuring better availability of mines on offer to potential investors, and is synergistic to the objective of Government of India to faster operationalisation of newer coal mines for energy security of the nation.

The commencement of sale of tender document started from 25 March and the bid due date is 24 June 2021. Details of the mines, auction terms, timelines, etc., can be accessed through the following link: https://www.mstcecommerce.com/auctionhome/coalblock/index.jsp