Anurjay Dhal
BHUBANESWAR: The Naveen Patnaik led Government in Odisha, which was expecting to get near about Rs 10,648 crore from 9 Coal Blocks of the total 41 put for auction for commercial coal mining, may wait for another 3 to 4 months to get the share with Union Coal Ministry is reportedly planning to delay the bidding for another 3 months from now. Most of the mines earmarked for commercial auctions are located in Madhya Pradesh 11, followed by Chhattisgarh 9, Jharkhand 9, Odisha 9 and Maharashtra 3.
The Union Coal Ministry had in July first week, said last date for purchase of Tender Document after payment of a fee of Rs. 5,00,000 (Rs. FiveLakh Only) per mine/ block on MSTC Limited website is 14.08.2020 and last date for submission of bid on MSTC Limited website is 1400 hours on 18.08.2020.Bidders will not be allowed to submit their bids beyond stipulated date and time.
Sources in Coal Ministry however confirmed that some big industry players have approached Union Coal-Mines Minister Pralhad Joshi and Secretary Anil Jain to delay the commercial coal auctions by three months. Industry players have pointed that more time is needed for identifying reliable coal customer to purchase coal and assess the grade of coal for the companies to take informed decision.
The Ministry on June 18 had launched the maiden auction for coal blocks without any end-use restrictions, and the bidding is scheduled to take place on August 18. This would also be the first set of coal assets to be auctioned off through the new market-determined revenue share model that replaced the fixed fee/tonne regime that turned off private investors. Also, as approved by the Cabinet in January, unexplored coal blocks have been put up for auctions for the first time, which is seen to add certainty of tenure from the prospecting to the production stages.
As per Coal Ministry estimates, 41 coal mines are likely to produce about 225 million tonnes annually. It will require Rs 33,000 crore in capital expenditure to get these mines going and, at potential coal prices of Rs 1,500 to 2,000 per tonne, they are likely to generate about Rs 34,000 to Rs 45,000 crore in annual coal revenues.
The 9 mines blocks including Chendipada I, Chendipada II, Machhakata, Mahanadi, Radhikapur (East), Radhikapur (West), Brahmanbil & Kardabahal, Kuraloi (A) North, and Phuljhari (East & West) were put for auction in Odisha. Most of these Blocks belongs Angul-Talcher coal Belt, close to Satkosia and Similipal Tiger Reserves.
Additionally, state governments will probably generate more than Rs 20,000 crore per year in royalties from these mines: Odisha (9 mines) – Rs 10,648 crore; Chhattisgarh (9 mines) – Rs. 4,399 crore; Jharkhand (9 mines) – Rs 3,242 crore; Madhya Pradesh (11 mines) – Rs 1,897 crore; and Maharashtra (3 mines) – Rs 432 crore. Jharkhand’s mining royalties have ranged from Rs 4,000 crore to Rs 5,000 crore per year, so these mines are likely to increase royalties by 60-75 per cent for my state.
Commercial coal mining is projected to provide more than 3 lakh direct and indirect jobs. This will create much-needed employment opportunities in remote rural areas, where labourers have returned after the lockdown. In addition, it is expected that these 41 mines will provide Rs 112 crore annually for the District Mineral Foundation Fund (DMFF).
Today, coal is our third-largest import. In 2019, we imported about 235 million tonnes of coal, spending Rs 1.71 lakh crore or about $23 billion. We import both thermal and coking coal from Indonesia, South Africa, Australia, and Russia. India has the world’s fifth-largest reserves of coal, yet we are the world’s second-largest importer.
Only China, at about 300 million tonnes per year, imports more coal than us.While it is difficult for us to reduce our oil and natural gas imports, which accounted for $120 billion or so in imports in 2019, we can definitely ramp up domestic coal production.
Top five states with highest coal reserves include my home state Jharkhand (26 per cent), Odisha (24 per cent), Chhattisgarh (17 per cent), West Bengal (11 per cent), and Madhya Pradesh (8 per cent).
Currently, India produces about 729 million tonnes of coal per year with the bulk of the production (602 million tonnes or 83 per cent) coming from Coal India Ltd. In the next few years, the Coal Ministry has indicated that Coal India Ltd should produce 1,000 million tonnes per year. However, to meet its growth requirements and become self-sufficient, India should expand its production to 1,500 million tonnes per year.
