In a major windfall gain, Jindal Power ltd on Thursday bagged two coal mines in Chhattisgarh for an estimated Rs 1,679 crore, while another corporate big-wig Aditya Birla group-firm Hindalco Industries won a block in the same State for estimated Rs 14,858.9 crore. Incidentally, Jindal Power held the two blocks namely Gare Palma 2&3 earlier also and, therefore, in a sense, retained them.
later on Thursday evening, Ultratech Cement ltd bagged the Bicharpur coal block. With this, out of the total 19 blocks on offer for auction in the first tranche, 16 reserves have been bid out by the Government and around Rs 80,000 crore worth of revenue has been generated through the exercise till now. This will all go to the respective State Governments where the mines are located.
Shares of Jindal Steel and Power ltd (JSPl) surged by 25 per cent and this was the biggest gain among BSE listed shares during the day, after its entity Jindal Power bagged the two blocks. Hindalco's shares showed a 4.6 per cent increase after the company bagged Gare Palma IV/5 block. This block was earlier with Monet Ispat.
Coal Secretary Anil Swarup tweeted, "Gare Palma 4/2&3 goes at 108". Gare Palma IV/5 mine was won by Hindaco Industries at Rs 3,502 per tonne early on Thursday, though it was put on offer on Wednesday. The bidding for the block lasted for over 12 hours.
The other companies which were vying for Gare Palma IV/2 and IV/3 mines included Adani Power Maharashtra, DB Power, GMR Chhattisgarh Energy ltd, Jindal Power ltd, Jindal India Thermal Power ltd, JSW Energy ltd, KSK Mahanadi Power Company ltd, Reliance Geothermal Power Pvt ltd and Sesa Sterlite.
The companies in the race for Gare Palma IV/5 mine included Ambuja Cements, BAlCO, Hindalco and Monnet Ispat & Energy ltd. The bidding for Bicharpur mine was still underway at the time of going to press. The companies in the race for the block include ACC ltd, Hindalco Industries, Hindustan Zinc, Jaypee Cement Corp, Monnet Ispat & Energy, OCl India ltd ltd and UltraTech Cement ltd.
The Government is auctioning the coal blocks after the Supreme Court cancelled allocation of 204 mines in September last year. GMR Chhattisgarh Energy, Reliance Cement, Sunflag Iron and Steel, Jaiprakash Associates and BAlCO are among the companies that have bagged coal mines so far in the auction.
Gare Palma IV-5 mine has estimated extractable reserves of 42.43 million tonnes, while Gare Palma IV 2&3 together have extractable coal reserves of 155.49 million tonnes. The Government meanwhile claimed that the enthusiastic response to the ongoing auction of coal blocks has vindicated CAG's criticism of the way the natural resources was allocated by the previous UPA Government, Commerce and Industry Minister Nirmala Sitharaman said on Thursday.
"Certainly the CAG's position has been vindicated but I am underlining the larger issue here...Our position has been vindicated," she told reporters on the sidelines of an event. She added that "the last CAG report (in 2012) on the coal block allocation was unfortunately unnecessarily criticised but today the figures and the way in which the coal block allocation has been designed by this government in a very transparent manner and has shown two things".
Coal block allocation during UPA period led to loss of staggering Rs 1.86 lakh crore as per the Comptroller and Auditor General (CAG) estimate. The CAG report had caused tremendous discomfort for the UPA Government and the Congress that headed the coalition. The coal blocks were earlier allocated through a screening committee mechanism.