Prospective coal block bidders seek bundled approvals

KOLKATA (miningweekly.com) – Large Indian coal-consuming companies planning to enter commercial coal mining have asked the government to bundle mandatory approvals before putting up blocks for auction.

The companies made a presentation at a recent meeting where government sought input from various stakeholders on best practices to be adopted and auction rules to ensure the highest participation from domestic and foreign investors.

The meeting was attended by large Indian coal-consuming companies and prospective investors in coal mining, like steel producers Tata Steel, JSW, Jindal Steel and Power, as well as thermal power producers Adani Power and GMR Power.

The stakeholders made a case for the government to bundle prior approvals along with coal blocks that would be put up for bidding, including environmental and forest clearances.

With the government planning to hold auctions of the first tranche of coal blocks before the end of the current financial year on March 31, 2020, the stakeholders have also requested that government offer large contiguous coal blocks rather than truncated small ones entailing a number of mining projects. The companies pointed out that development of fragmented coal blocks would not enable investors to achieve economies of scale and would require a larger gestation period in putting up a number of small mining projects.

The government has earmarked 74 coal blocks to be put up for bidding and aimed to identify a total of 200 blocks to be offered to private miners over the coming years, the officials said.

One of the long-term suggestions under consideration is the introduction of a concept of ‘open acreage’ for the coal industry. This is currently the case for oil and natural gas fields auctions, wherein the investor is given the freedom to decide on size and kind of assets it wants to bid for.