In the coming e-auctions of cancelled but operational coal blocks, the ones with most controversy are likely to witness the stiffest fight from bidders.

From the seven operational blocks allocated to the power sector, Gare Palma-IV/2 & IV/3 and Talabira-1 stand out as the most attractive. in Chhattisgarh has the largest amount of reserves; Talabira, in Odisha, boasts of ready infrastructure and close proximity to evacuation facilities.

However, Gare Palma was earlier owned by Jindal Steel & Power and Talabira was with Hindalco. Both companies are being probed for irregularities in award of blocks.

“Legal cases against the promoters notwithstanding, these two blocks are the best of all. We would see new players with mining expertise contesting hard with the original owners, who’d make the most of the second chance to get their lost mines back,” said a power sector expert.

Experts said new entrants such as Sterlite Energy, Essar, GVK and Larsen & Toubro are the ones to watch. “These companies have technical capabilities and ready infrastructure to put to use the mined coal. They would compete hard for getting an operational block,” said an industry executive.

Gare Palma is part of a cluster of four mines in Chhattisgarh owned by JSPL which are under litigation. The charges against JSPL are of criminal conspiracy, excess mining and selling to a third party from the captive block. By the Supreme Court’s directive, JSPL would also pay the highest amount of penalty, close to Rs 3,000 crore, for its four cancelled blocks.

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Courtesy: Business Standard