NEW DELHI: The government has received stellar response in the sixth round of commercial coal mines auction due to lower premium, a top government official told this newspaper. Earlier, the government used to command a high premium of as much as 90% or sometimes even more, for which many companies had to surrender their mines as they would incur losses, him.
Out of 141 mines, which were put on auction in the sixth round, the government received bids for 34 mines, out of which the result for 18 mines has been declared so far. “This time the average premium charged was 25%. The variation was quite wide with the lower premium as less as 5% and as high as 65%. The companies’ bid as per the logistics so that they don’t incur heavy cost,” said the official. He further said many mines, which couldn’t be auctioned in the last round, were put for auction in this round.
“The government finally realised it won’t be able to allocate mines to private players if they keep higher premium. That’s why, this time around it lowered the price significantly, so that they become economically reasonable for the firms to initiate commercial mining,” he added.
The official says, “Next round will most likely commence in the second half of March and nearly 25 new mines will be added in the auction.” Surinder Kumar Gupta, Chairman and MD of MSTC, said, “People are realising the need for coal in India will persist for quite some time. So, coal is going to be a major contributor to the type of growth India will have in the future.”