Govt Ex­pects Good Re­sponse to Auc­tions

Coal min­istry to start auc­tions of non-cap­tive coal mines next fis­cal af­ter con­clu­sion of elec­tions in five states

The Economic Times - - Companies: Pursuit Of Profit - Sarita.Singh@ times­group.com

New Delhi: The gov­ern­ment ex­pects good re­sponse to auc­tions of coal blocks for com­mer­cial min­ing, given the spurt in prices of im­ported coal and signs of growth in core do­mes­tic in­dus­tries. The coal min­istry is likely to ini­ti­ate the auc­tions of non-cap­tive coal mines next fis­cal af­ter the con­clu­sion of elec­tions in five states.

Prices of im­ported coal have been ris­ing in the last few months. The prices in­creased 61% year-on-year in the last quar­ter due to im­proved de­mand from China in the last two quar­ters. The eight core in­dus­tries grew 5.6% in De­cem­ber with ex­pan­sion in steel and elec­tric­ity sec­tors.

Coal sec­re­tary Susheel Kumar has said the coal min­istry will kick-start the process to open up com­mer­cial min­ing for the pri­vate sec­tor in the next fi­nan­cial year. Of the 25 coal blocks to be al­lo­cated in the next fi­nan­cial year, four will be auc­tioned to pri­vate firms for un­spec­i­fied end-use while 19 other blocks will be on of­fer for cap­tive coal min­ing. Two blocks have been iden­ti­fied for al­lot­ment to state-run firms, Kumar said last week.

A se­nior gov­ern­ment of­fi­cial said the de­ci­sion to restart coal block auc­tions has been taken in view of the rise in im­ported coal prices and signs of re­vival in eco­nomic ac­tiv­ity. The de­ci­sion is in line with the sug­ges­tions of a group of sec­re­taries to Prime Min­is­ter Naren­dra Modi last month to start pri­vate com­mer­cial coal min­ing in the coun­try within a year. The gov­ern­ment was forced to an­nul the last round of cap­tive coal auc­tions due to poor re­spon- se from steel and ce­ment firms. Of the nine mines of­fered in the fourth round, seven re­ceived less than the re­quired three bids, while two re­ceived just three bids. In to­tal, the nine mines re­ceived just 15 bids. The lame re­sponse was at­trib­uted to in­creased do­mes­tic coal pro­duc­tion, slump in in­ter­na­tional coal prices and fi­nan­cial stress in the steel and alu­minium sec­tors.

“Im­ported coal prices have picked up in the last few months. There­fore, we ex­pect a good re­sponse to coal auc­tions. We feel this is the right time to be­gin auc­tions for com­mer­cial coal min­ing,” the of­fi­cial said.

The coal min­istry is ready with frame­work for com­mer­cial coal min­ing that will be is­sued for pub­lic com­ments in March af­ter elec­tions in UP, Pun­jab, Ut­tarak­hand, Goa and Ma­nipur, he said.

The min­istry has al­ready iden­ti­fied big par­tially-ex­plored coal blocks for com­mer­cial min­ing with much larger re­serves than the mines bid out to cap­tive min­ers.

Of the 25 coal blocks to be al­lo­cated, four will be auc­tioned to pri­vate firms for un­spec­i­fied end-use

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