Coal block auctions prove goldmine for Madhya Pradesh

The Union coal ministry’s ongoing coal block auctions in Madhya Pradesh have come as a bonanza for the cash-strapped state, which has so far netted Rs 26,843 crore from the auctions of three mines, according to officials.

The Union coal ministry’s ongoing coal block auctions in Madhya Pradesh have come as a bonanza for the cash-strapped state, which has so far netted Rs 26,843 crore from the auctions of three mines, according to officials.

The state’s economy has been under a strain with the government’s market borrowing exceeding Rs 6,000 crore this fiscal year.

The auctions began on Saturday and the successful bidders had been Anil Ambani-led Reliance Cement, Jaiprakash Associates and Jaiprakash Power Ventures, which bagged Sial Ghoghri coal mine in Chhindwara district, Mandla (North) block and Amelia (North) mines respectively.

According to the Union ministry website, six more mines will be auctioned in the state this fiscal year. Out of them, three will be auctioned in the first phase. In all 22 Madhya Pradesh mines are on the auction list, officials said.

The next mine in MP that will go under the hammer is Bicharpur coal block having reserves of 29.12 million tonne. The qualified bidders include ACC Cement, Birla Corp, Hindalco, Hindustan Zinc, Jaypee Cement and Ultratech Cement among others, sources said.

Detailing about the recent auctions, officials said though the full amount would be received over a long-term lease period, however, the money would start flowing in immediately as six out of nine mines, which are to be auctioned before March 31, were already operational. The money flow will also come as the firms would have to pay the annual royalty to the state government.

“The process has just begun and companies have bid aggressively (for first three coal blocks). We expect a similar response for the remaining blocks in the first phase. Our estimate is that we will be getting three to four times more than what we used to get until now, so financially we will be in much better condition,” secretary (mineral resources) Shivshekhar Shukla told HT.