Government invites bids for 3 coal blocks in first auction

The government has initiated auction of coal blocks by inviting applications for the first time, for allocating coal blocks through competitive bidding for specified end-uses.

The coal ministry has invited bids for three coal blocks containing reserves of about 499.4 million tonnes, in its first auction of mining rights after the investigations into its earlier practice of coal block allocation.

The three coal blocks on offer include:

  • The Jhirki & Jhirki (West) of East Bokaro Coalfield in Jharkhand, having approximate geological reserves of 267.91 million tonnes of coking coal, for allocation to steel mills (blast furnace);
  • Andal Babuisol block of Raniganj Coalfield in West Bengal, having approximate geological reserves of 103.841 million tonnes for allocation to sponge iron makers; and
  • Tokisud-II block of South Karanpura Coalfield pm Jharkhand, having approximate geological reserves of 127.69 million tonnes of cement.

The bidders are required to bid above the prescribed floor price. The detailed documents, including RFP, copy of the geological report, etc are available for sale at the Central Mine Planning and Design Institute Limited (CMPDIL) office, Ranchi, a mines ministry release said.

This is the first coal block auction by the mines ministry after the controversial allocation, dubbed "Coalgate", came up in 2012 after the Comptroller and Auditor General (CAG) questioned the government's policy of awarding mining concessions without competitive bidding.

The CBI is probing the issue of coal block allocations to industrialists and companies as directed by the Supreme Court.

The ministry had said in September that bidders would have to agree to milestones for obtaining environment and forest clearance permits and for developing the blocks.

Many companies that received coal blocks over the past decade had to give them up recently as the government found them slow to develop the blocks.

Environmental issues and the problem of securing land for mining have made India the third-largest importer of coal, even though it sits on the fifth-largest reserve.