Foreign firms shun Indian coal mine auctions, 40% of mines find no takers

CHENNAI (Reuters) - India has received no bids for 15 of 38 coal mines it is auctioning to attract private investment, reflecting little appetite for the sector clouded by environmental concerns and low margins.

FILE PHOTO: A worker shovels coal in a supply truck at a yard on the outskirts of Ahmedabad, India, October 25, 2018. REUTERS/Amit Dave/File photo

The world’s second largest consumer, importer and producer of coal has offered a range of financial incentives to attract investment and reduce imports.

Coal production in India has largely been restricted to state-run Coal India Ltd and another smaller government-controlled company but Prime Minister Narendra Modi opened up the industry to the private sector this year.

“A total of 76 bids have been received for 23 coal mines,” the coal ministry said in a statement on Tuesday, adding that two or more bids have been received for only 19 of the 38 mines.

The billionaire Gautam Adani-controlled conglomerate, which bid for over half the 23 mines which will go under the hammer next month, accounted for nearly a sixth of all bids submitted, the coal ministry said.

The participation by the Adani Group marks a change in strategy from last month, when its chief financial officer said the conglomerate was not interested in the mines being auctioned.

The conglomerate submitted technical bids through four of its companies - Adani Enterprises Ltd, Chendipada Collieries Private Ltd, Stratatech Mineral Resources Private Ltd and Adani Power Resources Ltd.

An Adani spokesman did not comment, but had said last month the group could re-evaluate its participation if it saw demand for coal picking up.

Aluminium companies Hindalco Industries Ltd, Bharat Aluminium Co Ltd, India’s Vedanta Ltd, Jindal Steel and Power Ltd and JSW Steel Ltd were among the 42 companies which participated, the coal ministry said.

Companies with little or no experience in coal mining, such as New Delhi-based ND Pharma Private Ltd, Bansal Construction Works Pvt Ltd and refrigerant gas refiller Refex Industries Ltd had also submitted technical bids.

Reporting by Sudarshan Varadhan; Editing by Robert Birsel and Elaine Hardcastle