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Jindal Power, Balco, and BS Ispat, may end up losing the producing coal mines which they won in the first round of phase I of the auctions. The bids made by these three winners came under the scanner due to extremely low prices quoted by the companies.
An inter-ministerial committee comprising representatives from the Finance, Power, Mines, Steel, and Coal ministries is said to have submitted its report to the Coal Ministry. Official sources said the awards are likely to be cancelled, as instance of rigging by the bidders has been found.
Aware that this would lead to litigation, an official said: “We expect the companies to challenge the decision.”
Asked how the committee has concluded that there was rigging, another official said, “For most blocks, the bidding started at noon and ended late night. But for Gare Palma IV/2&3 (won by Jindal Power), bidding started at noon and got over in just 45 minutes with the competitors withdrawing their bids. Is this not a clear case of cartelisation amongst the bidders?”
Once the Coal Minister takes a final decision on the inter-ministerial committee report, the Ministry will put the mines on offer again.
For mines reserved for the power sector, the bid went as high as ₹1,110 a tonne for a block won by Essar Power.
Gare Palma IV/2&3 despite having 155.49 million tonne extractable reserves, went at the lowest rate at ₹108 a tonne. Jindal owned this block prior to de-allocation as well.
In the non-power category, the highest bid was for ₹3,502 a tonne for a mine won by Hindalco for Gare Palma IV/5. However, bids for Gare Palma IV/1 (Balco’s winning bid of ₹1,585 a tonne) and Marki Mangli III (BS Ispat’s winning bid of ₹918 a tonne) were low.
Recently, the Coal Ministry has asked the Nominated Authority — which is supervising the auctions — to review five auctioned blocks from the ready-to-produce mines category due to the low bids.
The five blocks are those won by Hindalco Industries, Jindal Power, Jaypee Cement, Usha Martin and Trimula Industries.
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