Hindalco, Jindal bag blocks; power tariffs will dip after auction: Goyal
Companies on Thursday aggressively bid for coal blocks to cut down on their import bill and reduce dependence on Coal India, which supplies almost 80% of the country’s fuel requirements.business Updated: Feb 19, 2015 23:43 IST
Companies on Thursday aggressively bid for coal blocks to cut down on their import bill and reduce dependence on Coal India, which supplies almost 80% of the country’s fuel requirements.
The allocation of blocks, including through the auction, will fetch Rs 15 lakh crore over the next 30 years for states, power minister Piyush Goyal said. Power costs will come down since the benefits of the auction will have to be passed on to consumers, he added.
Aditya Birla group firm Hindalco Industries won a block in Chhattisgarh for an estimated Rs 14,858.9 crore, while Jindal Power Ltd bagged two coal blocks in the state for `1,679 crore, on the fifth day of the auction.
Following the news, shares of Jindal Steel and Power Ltd rose 29% on the BSE, its biggest gain in 7 years. Hindalco was up 3%.
Firms have won 15 blocks so far.
Hindalco won Gare Palma IV/5 block at Rs 3,502 per tonne. The block, slotted under the non-power sector in the ongoing auction, has estimated extractable reserves of 42.43 million tonnes (MT), while Gare Palma IV 2&3 together have extractable coal reserves of 155.49 MT.
Hindalco had earlier won a mining block in Kathautia in Jharkhand, also under the non-power sector category, for `2,860 per tonne. It has extractable coal reserves of 23.963 MT.
States including Chhattisgarh, Jharkhand and West Bengal are set to get over `50,000 crore from the sale of coal blocks in the ongoing auction, sources said.
The Centre is auctioning the coal blocks following the Supreme Court’s cancellation of the allocation of 204 mines in September last year. It has put 19 blocks up for bids in the first tranche and the last day for auction is February 22.
(with agency inputs)