Government starts auctioning coal blocks

Commencing the first auction of coal blocks after a probe dented UPA government’s image in the earlier allocation process, the Centre has put up three coal blocks in Jharkhand and West Bengal for bidders.

“The auction will feature mines that have total reserves of 500 million tonnes. The government has initiated the auction by inviting applications for the first time for allocating coal blocks through competitive bidding for specified end-uses,” the Coal Ministry said in a statement on Wednesday.

Two of the coal blocks are located in Jharkhand and one in neighbouring West Bengal. The type of coal from the blocks would be used in the steel, cement and sponge iron industries, it said.

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

The move comes after the Centre drew flak for delaying the auction and the CAG earlier saying that allotment of 57 mines to private firms without auction had resulted in a notional loss of Rs 1.8 lakh crore to the exchequer.

Last year, the government had allocated 17 coal mines to central and state public sector units, including four to National Thermal Power Corporation. It had also planned auctioning of 54 coal blocks with total estimated reserves of about 18 billion tonnes.

The blocks in Jharkhand include Jhirki & Jhirki (West) of East Bokaro Coalfield having geological reserves of 267.91 MT coking coal for steel (blast furnace) and Tokisud-II of South Karanpura Coalfield with 127.692 MT of reserves for cement plant.

The mine in West Bengal, Andal Babuisol of Raniganj Coalfield, has about 103.841 MT of reserves for sponge iron.