Commercial mining: Auction of coal blocks may generate Rs 20,000 cr revenue per year

The auction of coal blocks for commercial mining may lead to total revenue generation of around Rs 20,000 crore per year, a coal ministry official said.

The process for auction of 38 coal blocks for commercial mining is underway.
“The total revenue for one year is expected to be around Rs 20,000 crore and capital investment is around Rs 33,000 crore,” the official said.

“One year revenue (for 41 coal mines with 225.53 peak rated capacity) is calculated and comprises revenue share at four per cent i.e the floor price, royalty, NMET, DMF….calculated at peak rated capacity (PRC) considering representative price of average grade of the coal mine,” he said.

Capital investment is calculated at Rs 150 crore per million tonnes per annum (MTPA) for PRC, including evacuation, he said.

On the government’s claim made earlier that the auction of blocks will also lead to job creation for more than 2.8 lakh people, the official said employment generation is calculated considering output per employee “to be 5,000 tonne/annum , 30 per cent leaves.”

Approximately 30 per cent manpower, he said, will be engaged in associated infrastructure such as washeries, railway sidings etc and the indirect employment is three per one direct employment, the official said.

When the Centre launched the auction of blocks for commercial mining in June, it had said that it would put on sale 41 blocks. But later, the list of blocks for auction was revised to 38.

Vedanta, JSPL, Adani Enterprises, Hindalco Industries, JSW Steel and Nalco are among the 42 companies that have submitted bids for 23 coal blocks that were put up for auction under commercial mining.

“A total of 76 bids have been received for 23 coal mines… A total of 42 companies have submitted their bids in the auction process,” the coal ministry had earlier said in a statement.

The highest number of bids (seven) were submitted by Adani Enterprises, followed by Hindalco Industries and JMS Mining (five each).

The Andhra Pradesh Mineral Development Corporation, Aurobindo Reality and Infrastructure, and EMIL Mines and Minerals Resources submitted four bids each.
Vedanta Ltd submitted three bids, Jindal Steel and Power Ltd (JSPL) submitted two, JSW Steel and Nalco one each, among others.

Of the total 76 bids, the highest number of bids were made for Gotitoria (East) and Gotitoria (West) and Gare Palma IV/7 coal blocks (eight bids for each), followed by six bids each for Brahmadiha and Urma Paharitola mines.

The ministry had said two or more bids have been received for 19 coal mines.
The bids will be evaluated by a multi-disciplinary technical evaluation committee, and technically qualified bidders would be shortlisted for participation in the electronic auction to be conducted on MSTC portal from October 19.