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Tuesday, November 15, 2011

Indian coal ministry to soon put 51 to 54 blocks for bidding

Tuesday, 15 Nov 2011

Faced with an alarming coal crisis on the back of higher import cost and fewer resources within the country, coal ministry is planning to come out with a list of 51 to 54 coal blocks with resource potential in excess of 11 billion tonne by the end of this month. The ministry is expected to begin the tendering process in next couple of moths.

Mr Sriprakash Jaiswal union minister of coal told Financial Chronicle that "I can confirm that the ministry is has identified in excess of 50 blocks with resource potential over 11 billion tonnes. But these blocks have not come for my clearance yet."

The minister said the blocks would be given to public and private sector companies. Mr Jaiswal said that "Our intention is to provide Coal India with sufficient stock that it can take care of its needs for the next 30 years. While the remainder would be given to the state and the public sector companies and the remaining to the private sector companies for captive use.”

The whole bidding process would be completed in next two-three months, after which the E auction process would be started. Mr Jaiswal said that “Though 10% of CIL's coal is already given through e auction, we would provide e auction on priority basis to power companies like NTPC if they can take coal by road. The coal would also be available to cement and steel companies.”

People close to the development told Financial Chronicle that 51 blocks which have been identified are mostly in Jharkhand, Orissa, Chhattisgarh and West Bengal and the remaining distributed across various states like Maharashtra and Andhra Pradesh.

Out of 51 blocks on offer, only seven blocks are fully explored while the rest of them are regionally or partially explored. These 51 blocks identified by the ministry are from 17 coalfields, some of them being Talcher (6 blocks), Godavari (3 blocks), Hasdeo-Arand (3 blocks), Mand Raigarh (5 blocks) and Raniganj (8 blocks).

An industry official told FC that the draft published by ministry of coal requires some clarity on four bidding options provided to bidders.

The draft specifies four options for competitive bidding first, a one time bullet payment, second, a payment linked to production, third option would consider a one time bullet payment with weightage given to parameters like same state priority. The fourth and the last option would look at production linked payment with weightage to current power or steel or fertilizer generation capacity.

According to the ministry of coal website there are 229 (148 existing and 81 newly identified) coal blocks for allocation to specified end users and government. The 208 coal blocks have so far been allocated to eligible companies. So far, production has commenced in 26 coal blocks (14 private and 12 public) and the production from these coal blocks for the year 2009-10 was 35.313 million tonnes and for the year 2010-11 (up to December, 2010 prov) was million tonnes as reported by the Coal comptroller’s office.

(sourced from mydigitalfc)

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