India

No bids for over 70% of Indian coal mines up for auction

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A worker carries a container filled with drinking water at a railway coal yard on the outskirts of the western Indian city of Ahmedabad November 25, 2013. REUTERS/Amit Dave

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CHENNAI, July 9 (Reuters) - India received no bids for 48 of the 67 mines up for sale as part of its plan to open up coal mining to private companies, reflecting little investor appetite for a sector clouded by environmental concerns and low margins.

Prime Minister Narendra Modi last year offered financial incentives to the private sector and removed restrictions on the end-use of the fuel in a bid to reduce imports and make India a net coal exporter.

India has the world's fourth largest coal reserves and is the second largest coal consumer, importer and producer.

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In a statement released late on Friday after a deadline for the submission of technical bids, the coal ministry said only 19 of the 67 mines had drawn interest.

"Four of these mines are coking coal mines and the remaining 15 fifteen mines are non-coking coal mines," the ministry said.

Only eight mines received more than one bid, according to the statement. Auction guidelines stipulated a minimum of two technical bids for financial bids to be considered valid.

In the first coal mining auctions for the private sector without restrictions on end-use of the fuel conducted last year, there were no bids for nearly half of the 38 mines.

Production in India has largely been restricted to state-run Coal India Ltd and another smaller government-controlled company.

While coal still accounts for over 70% of India's power production, India has pushed a renewables policy which envisages increasing green energy capacity more than four-fold by 2030.

Adani Power, Hindalco Industries (HALC.NS) and Vedanta Ltd (VDAN.NS) were among the companies that submitted bids. No foreign miners took part.

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Reporting by Sudarshan Varadhan; Editing by Kirsten Donovan

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