By Our Correspondent
NEW DELHI/BHUBANESWAR/ANGUL/SUNDARGARH: Private players like Rungta Mines Limited, Jindal Steel and Power Ltd, JSW Steel-Energy, Essel Mining and Industries Ltd, Hindalco, Tatas, Sesa Goa, Vedanta Industries Ltd, Adani Group and global players like Rio Tinto, BHP Billiton, PesBody, Glencore and Vale are among those eyeing on Odisha’s Coal block, sources said. The Union Coal Ministry will issue a tender and seek bids from Thursday.
Union Coal Ministry has finalised 38 coal blocks for the auction and three more mines could be added to the tally, a senior government official said, adding that the peak capacity of the reserves is estimated to be at least 220mn t/yr. The blocks, which also include underground mines, are largely explored. This should help companies to make informed investment decisions.
Odisha , which houses 79,295 Million ton of coal deposits, is the second most Coal bearing State in the Country while India is the 5th biggest coal bearing Nation in the World. In past, Odisha Government only auctioned 1 coal block-Jamkhani, which had won by Anil Agarwal’s Vedanta Limited. The Coal Ministry is auctioning as many 40-50 blocks. Odisha has hiked it coal production by 23 % in last 5 years, while National Coal Production increased by 24 %.
These Blocks in Odisha may see big fight. Utkal-A (Category I) having status of explored under Talcher Coalfield, Angul, was earlier allocate to Mahanadi Coalfields Ltd, JSW Steels Ltd, Jindal Thermal Power Corp. Ltd., Jindal Stainless Steels Ltd and Shyam DRI Ltd.
Chendipada-II (Category III) status explored under Talcher Coalfield of Chendipada in Angul was earlier allocate to Uttar Pradesh Rajya Vidut Utpadan Limited,Chhattisgarh Mineral Development Corporation Limited, Maharashtra State Power Generation Corporation Ltd.
Mahanadi (Category III) status explored under Talcher Coalfield of Chendipada in Angul was earlier allocate to Gujarat State Electricity Corporation Limited, Maharashtra State Electricity Board
Bijahan(Category III) status explored under IB River Coalfield in Himgiri of Sudargarh was earlier allocate to M/s Bhushan Power & Steel Ltd and M/s Shri Mahavir ferro Alloys Pvt. Ltd.
Radhikapur (East, Category III) (Including Utkal F) Coal Block)(Category III) status explored under Talcher Coalfield of Chendipada in Angul was earlier allocate to TATA Sponge Iron Limited.
Radhikapur (West) (Category III) status explored under Talcher Coalfield of Chendipada in Angul was earlier allocate to M/s Rungta Muines Ltd, M/s OCL, India Ltd, M/s Ocean Ispat Pvt.
Chhendipada-I Block (Category III) status explored under Talcher Coalfield of Chendipada in Angul was earlier allocate to Uttar Pradesh Rajya Vidut Utpadan Limited,Chhattisgarh Mineral Development Corporation Limited, Maharashtra State Power Generation Corporation Ltd.
Machhakata Block (Category III) status explored under Talcher Coalfield of Chendipada in Angul was earlier allocate to Gujarat State Electricity Corporation Limited,Maharashtra State Electricity Board.
Nuagaon Telisahi (Category I) status explored under Talcher Coalfield of Chendipada in Angul was earlier allocate to Odisha Mining Corporation, Andhra Pradesh Mineral, Development Corporation (APMDC).
Jamkhani (Category III) status explored under IB Valley Coalfield in Himgiri of Sudargarh was earlier allocate to Bhushan Ltd, later Vedanta Group back it.
North of Arkhapal Srirampur (Category I) status partly explored under Talcher Coalfield in Angul Sudargarh was earlier allocate to M/s TFL has been allotted Northern part of North of Arkhapal-Srirampur coal block. Remaining part is unallocated.
Major producers of metals, power and cement are expected to participate in the auction. “Initial auctions for the larger mines may draw the larger players who will bid to de-risk supply and cost to their downstream business. Others will bid to use the mines to make profits through efficient and timely supply of coal in the open markets and still others who will seek to achieve both.
The broader acceptance of the reforms will be tested by the type and the number of international, private and public sector participants in the first few rounds. Unlike in the past, it is expected that the auctions will be see a broader mix of bidders and hence a higher competition between the interested parties for acquiring mines.
Commercial coal mining is expected to boost domestic production and lead to reduced coal imports, resulting in estimated savings of Rs 1.7 lakh crore or more. Private investments in new mines will also create thousands of jobs and big earnings for coal-bearing states.
India’s coal imports have fallen since the Covid-19 pandemic has curtailed coal demand, especially from utilities. Coal-fired electricity generation dropped by 22.09TWh from a year earlier to 69.56TWh in May, according to initial data from the Central Electricity Authority.
It will be a historic day when Indian coal sector will break free from the shackles of restrictions to charter new growth.As India has recently embraced Atma Nirbhar Bharat Abhiyan under the visionary and decisive leadership of Prime Minister Narendra Modi, the coal & mining sector has started gearing up to make the country Atma Nirbhar (self-reliant) in coal mining through structural reforms in the coal sector.
The commercial coal mining auctions are completely different from earlier regime of restricted sectors, use and price. Now there are no such restrictions at all.The proposed auctions have terms and conditions which are very liberal allowing new companies to participate in the bidding process, reduced upfront amount, adjustment of upfront amount against royalty, liberal efficiency parameters to encourage flexibility to operationalize the coal mines, transparent bidding process, 100% FDI through automatic route allowed and reasonable financial terms and revenue sharing model based on National Coal Index.
The successful bidders also will have flexibility in coal production unlike past and have provision for incentives for early production and coal gasification.The coal mines auction process will lay strong foundation for energy security in the country by producing additional coal providing large scale employment and huge opportunities for investment in coal sector. These efforts will supplement the 01 billion tonne coal production likely from Coal India in FY 23-24 and meet full requirement of domestic thermal coal.
The successful bidders will also have flexibility in coal production unlike the past and have provision for incentives for early production and coal gasification.Around 50 coal blocks are likely to be auctioned for commercial coal mining, a source had said earlier.
The mines to be put up for auction would be in three categories — small, medium and large. Some of the mines would come into production within a year of being auctioned, the source had added.The government had last month approved a methodology for commercial mining of coal on revenue sharing basis.The decision was taken during a meeting of the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister.Finance Minister Nirmala Sitharaman, while announcing the stimulus package for the coronavirus-hit economy, had said coal mines would be auctioned to the private sector for commercial mining to end reliance on imports and improve local production.
The methodology approved by CCEA provides that bid parameter will be revenue share, the government had said, adding that bidders would be required to bid for a percentage share of revenue payable to the government.Coal remains India’s fuel for energy at 54.3 percent of total 3.7 lakh mega watt (MW) installed power generation capacity in India. In FY20, growth in conventional generation of electricity was 0.26 percent against a high of 8.43 percent in FY15. Capacity utilisation was at 54.73 percent in FY20 as against 60.58 percent in FY15 for the coal based power plants.
The Coal Ministry first began the discussion in 2015 followed by a cabinet approval in 2018, to end-user restriction on sale or utilisation of coal. In March 2020, the said provision was approved under the law and methodology for auction was approved on May 20, 2020.
