The government on Thursday released draft rules for e-auction of cancelled coal mines in an approach paper that is open for public consultation.
The coal ministry has sought comments from stakeholders by Monday. The government said coal mines shall be earmarked for different end-use sectors and allocated through a competitive bidding process of e-auction.
The approach paper proposes the e-auction of the 204 coal mines that were cancelled by the Supreme Court in September 2014, fixing a floor price of Rs 150 per tonne for sectors such as steel, sponge iron, cement and captive power.
In the first phase the government plans to e-auction and allot 92 coal blocks under the Coal Mines (Special Provisions) Ordinance 2014.
The intrinsic value of the coal block will be calculated by computing its net present value, based on the discounted cash flow method. Operators will have to pay 10% of the intrinsic value upfront.
The approach paper has pointed that the floor price shall not be less than Rs 150 per tonne. The ceiling price of the prevailing Coal India Ltd notified price for each coal mine will be fixed and the bidder will be mandated to quote lower than this ceiling price, states the approach paper.
A fixed reserve price of Rs 100 per tonne of coal shall be payable, as per actual production by the mine allottee.
For power plants having uncontracted capacity, the bidder shall be restricted to cap its merchant capacity at 20% of the installed power capacity linked to the allotted coal mine. The reserve price in such cases shall not be less than Rs 150 per tonne, stated the approach paper.