New Delhi: Government on Thursday said it will auction 10 coal mines in the third tranche with reserves of 858.19 million tonnes for steel, cement as well as captive power plants and the process will be completed by August end.
The government has so far auctioned 29 coal blocks in two tranches to private companies and garnered over Rs 2 lakh crore, surpassing CAG's loss estimates of Rs 1.86 lakh crore in allotment of mines earlier without auction.
"We have lined up 10 coal blocks and all of these are in the unregulated sector... The auctions will be held from August 11 to August 17," Coal Secretary Anil Swarup said at a press conference here.
"There has been lot of demand from the unregulated sectors in the nature of industries in cement, steel and so on ... So, these are the blocks which would be put up for auction," he said.
Of the total estimated geological reserves, these mines have extractable coal of about 356.245 million tonnes and they are located in Maharashtra, Jharkhand, Chhattisgarh and Odisha, he said.
"The notice will be issued on June 8... Bid due dates that is the submission of the documents is July 21," Swarup said.
He said the government will execute agreements with successful bidders by August 31 and "so the process by and large will be completed by August 31".
The ministry has issued instructions to the Nominated Authority to conduct the auctions for mines classified for iron and steel, cement and captive power plant sector.
The Supreme Court in September last year had cancelled allocation of 204 coal mines to companies without auction terming the same as arbitrary and illegal.
The coal secretary further said that under schedule II category (producing) mines, two will be auctioned, while in the schedule III (ready to produce) eight mines will be put on offer.
The two mines in schedule II category are MarkiMangli-I mine in Maharashtra and Parbatpur-Central mine in Jharkhand. Both are explored blocks having extracble reserves of 62.12 million tonnes, the Coal Ministry said in a statement.
The eight mines in the schedule III category are Dongri Tal-II mine (Madhya Pradesh), KosarDongergaon (Maharashtra), Margi Mangli-IV (Maharashtra), Majra (Maharashtra), Chitarpur (Jharkhand), Bhaskarpara (Chhattisgarh), Sondiha (Chhattisgarh) and Jamkhani (Odisha), the statement said.
Swarup said that of the 10 mines to be auctioned, five are those which went unsold in the first two tranches earlier this year.
He further said that by and large the government will follow the same process as was followed in the auctions held earlier this year with just one change.
The modification is "that on this occasion we will treat multiple bids of a single entity as a single bid in terms of determining the 50 percent qualifiers", Swarup said.
He further said the ministry was considering auction of coal linkages for unregulated sectors, including cement and steel, for five years.
The ministry is seeking comments from the stakeholders on methodology for proposed auction of coal linkages/LoAs to non-regulated sector through competitive bidding.
Swarup said that "there are draft policy details which are going to be put today for seeking comments of various stakeholders then we take a final call on policy".
The ministry is also considering extending the linkages for existing holders by a year till June 30, 2016. After that, the existing linkage holders will also have to bid, Swarup said.
The policy for the linkages is expected to be approved in a month's time.
"In the regulated sector where coal price is low or lower then the assumed market price the final product whether it is of steel whether it is of cement the prices thereof are not regulated and that is the reason we why we felt that we should start with unregulated sector," he said.
Explaining the process, Swarup said that after determining the available coal from Coal India, bids will be invited at a price determined by the Government.
If the demand exceeds the availability, the price will be raised where some players will drop out. The government will keep increasing the price till such time that the demand matches availability, he said.
