India proposes to adopt a mechanism of the ‘rolling auction’ for coal auctions, which will allow a pool of coal blocks to continue, said Pralhad Joshi, Indian Coal Minister. “A comprehensive list of mines, along with key technical data are uploaded with rolling auctions, and mines for inclusion in the next auction may be preferred by bidders. This would be an ongoing process and the auction system would be speeded up. It will also better assist bidders to plan and improve system transparency,” said Joshi.
Coal is the first mineral resource to implement a rolling auction mechanism. The country has launched a commercial coal mineral auction tranche that offers 67 coal mines. Coal mines are available throughout six countries, Chhattisgarh, Jharkhand, Odisha, Madhya Pradesh, Maharashtra, and Andhra Pradesh. They are mixed with small and large mines, coking and coking mines, and partializing explored mines.
“We make coal the driving force behind the country’s economic activities. The Indian Coal sector offers enormous opportunities. Commercial coal mining will generate new investments, create large jobs, and boost countries. A market-based coal economy will help the nation”, said Joshi, Coal Minister. The Government also looks at the reform of the existing Coal India Ltd (CLI) electronic auction mechanism and consideration of the CIL’s various electronic auction windows. “This helps to move towards a one-coal price. The sale of coal to market prices would help simplify the system and promote transparency through an e-auction window”, added Joshi.
Special emphasis was placed on environmental protection in this auction section. In areas where forest cover is low, the coal quality is good, mines have been selected for infrastructure, and resettlement and rehabilitation are required to be done at least. Coal blocks have been selected. There have been more coking coal mines so Indian coking coal imports can be cut. In the first auction session, 19 mines have been auctioned with the premium quoted by successful bidders from 9.5% to 66.75%. In consideration of the high-capacity production of 51 million tones, the States shall earn about 7,000 crores of income from these auctions.
The consumer sector booked 19.8 million dollars for the first nine months of ongoing fiscal posting, under an exclusive auction window over a threefold increase against 6.8 million dollars in the sector booked at the year-on-year comparison. Coal India sells 20%-25% of coal to power consumers, non-power consumers, and importers of coal through multiple exclusive auctions. The suggestion that coal India should take a single e-auction would necessitate changes in current policy and the Union cabinet’s approval.
CIL reduced the reserve price near zero in the first half of the current fiscal period to boost demand. To test the market trend CIL introduced an additional value of 0 to 10 percent above the price reported. CIL is going to define its addition. They rely on steady Auction sales and increased premiums to measure their response. Last Year, these two 5.4 MTs auction bookings were 32 percent in October as compared to 2.4 MT booked under these auctions in September, unstructured charcoal market composed of consumers and traders without direct access to coal purchase, showed a healthy appetite in volume bookings as demonstrated in a spot auction and a special spot auction for all coal purchasers.
The Chakla mine in Jharkhand nearly won at 76.05 million tones by Hindalco Industries. The other bidders for the block were Adani Enterprises, Agarwal Mining, and Stratatech Mineral Resources Pvt Ltd. “Competent and reasonable offers. They were disputed. The States will benefit both from generating income and from creating jobs, said Anil Jain, Coal Secretary.
