This would also be the second set of coal assets to be auctioned off through the new market-determined revenue share model that replaced the fixed fee/tonne regime that had earlier turned off private investors.
The Union coal ministry has added 11 new blocks to the list of mines planned to be offered for the second tranche of the commercial coal auctions. With the new additions, as many as 75 mines with reserves of about 38,000 million tonnes (MT) of the fuel, will tentatively be offered for commercial mining without any end-use restrictions. Out of the 3.4 lakh MT of total coal reserve in the country, state-run Coal India owns blocks with combined reserves of 60,000 MT.
After the modest response from the investors in the first round of auction under the new commercial coal mining policy in November last year, the government has excluded mines falling in wildlife reserves and blocks in areas where there is more than 40% green cover to allay the fears regarding environmental norms. This would also be the second set of coal assets to be auctioned off through the new market-determined revenue share model that replaced the fixed fee/tonne regime that had earlier turned off private investors.
The mines offered in the upcoming auction are located in Chhattisgarh, Odisha, Jharkhand, Maharashtra and Madhya Pradesh. Mines currently under litigation or overlapping with active coal-bed methane blocks have also not been included in the latest list. The government had identified 41 blocks for the first round of commercial coal auctions, but after objections from Maharashtra, Chhattisgarh and Jharkhand, only 38 mines were put on auction.
Even though financial bids were received for 19 mines in the first round, the success rate was better than the previous ten auctions under the earlier regime, where bids were received for only 35 mines out of the 116 offered. The maiden auction under the commercial coal mining policy saw aggressive bidding by domestic and home-grown firms, with the highest premium received was 66.8% while the average premium quoted was 29%.