Lockdown delays commercial coal mining auction to July, govt finalises bid document
NEW DELHI: After more than five-year wait, the government may finally throw open the doors of the regulated coal sector for commercial mining by the private sector comprising both Indian and overseas miners in July.
Government sources said that draft rules, bid documents and agreements for commercial mining has been prepared and finalised and it would be approved by Cabinet soon before auctions start. In the first phase a total of about 80 large and small mines would be put up auction for commercial mining.
Government was looking to start auctions in April but
lockdown due to Covid-19 outbreak has delayed the process. Government is also reaching out to potential investors including milti-national corporations to ensure the success of its reform initiative. Indian missions abroad have also been activated to identify and get investors on board for possible participation in the auctions.
The decision to permit commercial coal mining would allow domestic mining firms
like Essel Mining, Sesa Goa,
JSW Energy, Vedanta, Adani and global giants like Rio Tinto, BHP Billiton, Pesbody, Glencore and Vale to mine and sell and help ramp up output from the country’’s huge reserves -the world’s fifth biggest. It will also offer an additional source of fuel for power producers, some of whom often face low coal stocks at their plants.
In order to address the concerns of the potential bidders, the coal ministry conducted pre-bid consultations stakeholders in Kolkata and Mumbai in February. Based on the suggestions received, the government has now agreed to ease bidding conditions that would form part of the document that would go for cabinet approval.
Source said that government is considering allowing composite route for potential bidders of commercial coal mine and offer simultaneous prospecting and mining lease to bidders to ensure certainty on the investments made by the bidders. This would also prevent companies from making aggressive bids that puts the company in a difficult financial situation at production stage.