India revises schedule for coal block auction

Source : https://www.argusmedia.com/en/news/2150370-india-revises-schedule-for-coal-block-auction

 

India has revised the timeline for awarding blocks to qualified bidders in its commercial coal mining auction, although the new schedule has not been announced yet. The coal ministry had previously planned to award the blocks by 9 November.

The nominated authority for conducting the auction has sought "supplemental information" and "additional clarification" on the technical bids submitted by bidders, causing a delay. Bidders have been asked to respond by 19 October, according to the auction website.

India received bids for 23 of the 38 coal blocks it is offering for commercial mining. A total of 42 domestic companies submitted bids, including mining firms and steel, aluminium and cement makers.

These technical bids, which were submitted on 29 September, are being examined by the authority that was also supposed to evaluate the financial bids from 19 October. A technical evaluation committee will then make final offers to qualified bidders by 9 November. The request for additional information has delayed the schedule for evaluating financial bids and the subsequent awards. A revised schedule for the tender process is expected to be announced next week.

Adani Enterprises, Adani Power Resources, JSW Steel, Jindal Steel and Power, Hindalco Industries, Vedanta, National Aluminium (Nalco) and Nuvoco Vistas were among those that submitted technical bids for at least one or more blocks. These companies have submitted a total of 76 bids for the 23 blocks. At least two or more bids were received for 19 blocks, India's coal ministry said on 30 September.

This is not the first delay to the lengthy auction process. India in August delayed the block auction by more than a month on concerns that the rapid rise in Covid-19 cases had dampened investor sentiment. The due date for submitting technical bids was postponed to 29 September from 18 August.

India's ambitious plans to open commercial coal mining to the private sector have faced challenges. The country's coal ministry originally opted to auction as many as 41 coal blocks, comprising 37 thermal blocks and four coking coal mines with a combined peak-rated capacity of 225mn t/yr, for the first round of bidding.

But growing opposition from some provincial governments forced the government to remove some blocks that lie in ecologically sensitive areas. A few blocks were also replaced, reducing the total to 38.

The federal government was also sued by the eastern state of Jharkhand, which has large coal reserves. The state was seeking to delay the auction because it expected a lukewarm response during the coronavirus outbreak.

Coal workers' unions opposed the auction and organised a three-day strike in early July leading to production losses at Coal India.

By Ajay Modi

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