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Coal Mining Auction - India's Private Companies Now have Easy Criteria

Coal News - Published on Wed, 16 Oct 2019

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A senior official said that the government plans to keep minimal qualification criteria for companies to participate in the auction of coal blocks for commercial mining. The government has identified 15 large blocks for the pilot round of bidding in December, adding that rules, bid documents and agreements for commercial mining are likely to be finalised soon. We want to keep the entry for commercial coal mining easy for companies. There will be minimal experience or net worth requirements for eligibility. The companies will be asked to submit upfront payment and bank guarantees like in the case of captive coal mines and this should take care of most of the concerns. Each of the 15 identified coal blocks will have a capacity to produce 4 million tonnes per annum, the official said. The government also plans to cap the upfront payment for some large blocks which might otherwise run into a huge amount.

The official said that many private steel and cement companies did not participate in the latest round of auction for captive coal mines because they wanted to hold on to their cash for commercial coal auctions. However, the companies said the blocks were too far from the end use plants.

Recent auction of captive coal mines for iron and steel, cement, and captive power plants had received a tepid response with only six blocks out of 27 receiving adequate bids to go under the hammer. The rest will be re-auctioned, the official said. Only companies registered in India can bid for commercial coal mines despite the Cabinet giving its nod to 100% foreign direct investment under automatic route for sale of coal, mining activities and infrastructure on August 28.

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Posted By : Rabi Wangkhem on Wed, 16 Oct 2019
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