The government has extended the last date for receipt of applications for allotting 17 coal mines to public sector firms under the new bidding regime. On the request of state government companies, coal ministry has extended the last date of receipt of application to February 8. However, the ministry has clarified that under no circumstances, any further extension will be given for the submission of applications after 8 February, 2013.
The government wants to allocate 54 blocks to public and private companies under the auction by Competitive Bidding of Coal Mines Rules notified in February 2012. Initiating the process of allocation of mines, the Coal Ministry had in December 31 invited proposals from PSUs for allotment of 17 coal mines to them, mostly for captive power plants. Presently, 17 blocks with 8.5 billion tonne (BT) reserves on offer are not explored yet. The 17 coal blocks include 14 acreages earmarked for companies to set up end-use plants in the power sector and three blocks for allocation to mining companies.
However, so far, not a single company has submitted an application for block allocation, which is showing uncertainty over the future cash flow from these coal reserves. While, to calculate the reserve price for coal blocks, the coal ministry has planned to ask selected companies to carry out exploration themselves owing to the dismal pace of exploration by Coal India’s subsidiary Central Mine Planning and Design Institute (CMPDI). After this, the government would calculate reserve prices for auction by linking it either to global coal prices or using Coal India prices as benchmarks.
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