Coal auctions under current round to fetch four states Rs 43,000 crore

The Economic Times | Nov 11, 2019

The highest revenue of about Rs 37,000 crore will go to Odisha, where Vedanta was the highest bidder at Rs 1,674 per tonne for the Jamkhani block with 222 million tonnes extractable.

KOLKATA: The current round of coal block auction for the non-regulated sector is likely to fetch four states about Rs 43,000 crore over the life of the mines from the extractable reserves, analysts said.

This, however, assumes that the entire extractable reserve of the six blocks auctioned under the current round are mined by the companies that emerged winners. “States will also benefit from additional revenue streams like royalty on Coal India’s notified prices besides the auction premium to be paid by the win-ning bidder,” said Jayanta Roy of ICRANSE -1.35 %.

The highest revenue of about Rs 37,000 crore will go to Odisha, where VedantaNSE -1.35 % was the highest bidder at Rs 1,674 per tonne for the Jamkhani block with 222 million tonnes extractable. Chhattisgarh will get about Rs 5,200 crore from two blocks — Gare Palma–IV/1 and Bhaskarpara. West Bengal will gain about Rs 900 crore from the Jaganathpur-B block, for which Powerplus Traders Pvt Ltd made the highest bid of Rs 185 per tonne for 50 million tonnes of extractable coal reserves. Madhya Pradesh is expected to receive Rs 490 crore as the estimated extractable reserves for its two blocks are very small.

It will be split between Bikram coal block that has 20 million tonnes and Brahampuri block that has 12 million tonnes.

Birla Corporation was the highest bidder for both. It bid Rs 154 per tonne for Bikram coal block and Rs 156 per tonne for Brahampuri coal block.

Funds would start to flow to the states from the winners of this auction in three to five years and would spread over the life of the mine.