Auctions of coal mines to raise more than 7 lakh crores INR
A total of six states is expected to earn a potential 80,000 crores INR by auctioning 12 coal mines, as is the richness of the Indian coal industry. For the last 10 months there have been several changes and countless number of amendments in the mining policies of the nation which has mostly been a disadvantage of the sector. However, observers from the industry have a different take on this as they feel this will benefit the poor states on the long run and thus also help in regaining premium status and helps in reshaping the future of coal mining in India. States like Maharashtra, West Bengal, Madhya Pradesh, Odisha and others have been the coal banks for India for years. These regions are the frontiers for the business as revenues from the black gold trading crosses annual predictions each year.
Recent policy changes in the Indian coal business:
The power switch in the country after the general elections many industries have undergone never before change waves and the coal sector is no exception to this. Prime Minister of India last December passed an order that gives permissions to the private players in the industry to mine and sell coal on an independent basis. This has happened after a long gap of 42 years as private mining and trading of coal wasn’t allowed.
As a result, Indian coal sector is expected to auction 204 of its coal blocks to private parties and this is predicted to bring a revenue of more than 7 lakh crores INR which is way ahead of any past revenue generation. This is an outcome powered by some aggressive bidding by renowned corporations from the sector who were waiting for such a move for a long while.
Auction, Participates and some early figures:
On 5th day of auction the coal mine in the Tokisud North in Mandla district of Madhya Pradesh was bagged by Essar Power at a bidding rate of 1,110 per tonne. This block has a total producing capacity of around 2.8 million tonnes per year and was previously operated by GVK Power. It was tough fight for the block as the competition was dense where Jaiprakash Associates, GVK Power, GVK Energy and Dhariwal Infra were running the race for the same.
Other Companies in the sector:
Reliance Cement, CESC, BALCO, Durgapur Projects and Hindalco are few popular players which are actively taking part in the auction for the coal mines.
How are the States going to earn from this?
Most of these coal deposits states are poor which have coal as their core revenue generating source. The state governments are all set to earn a total of 8,462 crores INR in the form of royalty that is payable by 12 companies. Out of them all; Madhya Pradesh rose of the most beneficial state which is predicted to earn a total sum of 26,843 crores INR for 3 blocks, it is likely to be followed by West Bengal which is set to acquire 11,203 crores INR for the same number of coal blocks.