Govt to soon start auction process for commercial coal mines

New Delhi: The government may soon start the process of commercial coal mine auction as it waits for feedback on the discussion paper floated by the coal ministry.

These mines will not have any restriction on the end use of the dry fuel. Besides, the private miners will have freedom to manage production, pricing and marketing strategy.

"We have recently put out a draft on commercial mining of coal on the website and invited public comments. Once we receive public comments (we will auction these coal blocks for commercial mining). We have also almost identified the coal blocks for the purpose," Power, Coal, Mines and New and Renewable Energy Minister Piyush Goyal told reporters at a conference of coal quality.

Goyal further said, "There will be big as well as small blocks for commercial mining of coal. There will be a mixture because every block has its own utility."

The public and other stakeholders have been asked to submit their comments and suggestions on the draft discussion paper by April 26. Asked whether the auction could be done in the next six months, he said, "Sure. We can do it. It will depend on the public comments received on the discussion paper. However, we have planned to do it this financial year only."

Earlier, Coal Secretary Susheel Kumar had said the coal ministry does not require Cabinet approval for auction of commercial coal mines as only the minister's nod would suffice.

A group of secretaries has also suggested that the government should create competition for the state-owned Coal India Ltd (CIL) by opening up commercial coal mining.

According to the discussion paper, there will be no restriction on the end use of coal mined from these blocks and commercial miners will have a certain degree of flexibility to manage their production depending on the market scenario.

These miners will also have full flexibility to decide its pricing and selling strategy. It said that as a first step, there should be auction of 2-3 large mines with peak rated capacity of around 30 million tonnes per annum.

Outlining the technical qualifications for bidders, it said their tangible net worth should not be less than Rs 1,500 crore and should have experience of excavating or handling at least 25 million cubic metre per annum in the last three years. It also provides for formation of joint ventures by private players to aggregate their credential to meet the eligibility criteria.

According to Kumar, as far as public power generators are concerned, the coal imports will be zero by 2017-18. The coal imports have already come down by 60 per cent for central power generators and by 37 per cent in the case of state generation companies.

Kumar added that Cheyyur ultra mega power project, which was earlier planned on imported coal, will now be based on domestic coal. Of late, the coal stock situation has improved in the country, which was about 69 million tonnes as on March 31, 2017, up from nearly 58 mt last year.