Two coal blocks were grabbed by private players on Tuesday on the second day of the second tranche of commercial coal auctions. Sunflag Iron and Steel turned out to be the preferred bidder for the Bhivkund coal mine in Maharashtra by offering a 9% revenue share to the state government. Kolkata-based Shreesatya Mines, the winner of Jharkhand’s Rauta closed mine offered a revenue share of 75.5% to the state government, which is the highest bid received till date in commercial coal mine auctions.
The Rauta block witnessed intense bidding, with four companies South West Pinnacle Exploration, Shree Sai Urja, Adhunik Power and Shreesatya Mines placing their quotes to win the mine. It is estimated to have 7 million tonnes (MT) reserve of G7-grade of coal, and is located only three kilometres away from the Ranchi Road railway station.
Three commercial coal blocks were auctioned off on Monday, marking the beginning of the second round of commercial coal auctions. South West Pinnacle Exploration had agreed to a revenue share of 24.3% for the Jogeshwar and Khas Jogeshwar block in Jharkhand while Adani Power Maharashtra bagged the Gondkhari block in Maharashtra by quoting a 9.5% revenue share. Adani subsidiary CG Natural Resources won the Jhigador mine in Chhattisgarh against a bid of 6% revenue share.
The maiden auction round under the commercial coal mining policy, held in November last year saw bidding by domestic and home-grown firms, where the highest premium received was 66.8% while the average premium quoted was 27%. As many as 20 mines out of the 38 offered could be auctioned off in the first round of auctions in 2020. The Union coal ministry had offered 67 blocks under the second round of auction for commercial mining, out of which eight mines could be finally put up for bidding.
With the tepid response received in the second tranche, the industry response to commercial coal mining is nearly at par with the previous ten auctions under the earlier regime, where only 35 mines were bid out of the 116 offered. Out of the 3.4 lakh MT of total coal reserve in the country, mines with extractable reserves of 2.3 lakh MT currently stand allocated to different entities. Public sector undertakings own currently own blocks with combined reserves of nearly 2 lakh MT.