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Nine coal mines of Odisha to be auctioned

Bhubaneswar: As many as nine coal mines of Odisha are among the 41 coal blocks in the country to be auctioned for commercial mining.
The mines are Chendipada I, Chendipada II, Machhakata, Mahanadi, Radhikapur (East), Radhikapur (West), Brahmanbil & Kardabahal, Kuraloi (A) North, and Phuljhari (East & West).
Prime Minister Narendra Modi on Thursday launched the auction process of 41 coal blocks for commercial mining. It was part of the series of announcements made by the Government of India under the Aatma Nirbhar Bharat Abhiyan.
In all 41 mines with total geological coal reserve of 17 billion tonne is on offer under the first phase of commercial coal mine auctions. These include both large and small mines with peak rated capacities (PRC) ranging from 0.5 to 40 million tonne per annum (mtpa) of coal. The cumulative PRC of all mines is 225 mtpa.
The commercial coal mining auctions are completely different from earlier regime of restricted sectors, use and price. Now there are no such restrictions at all.
The proposed auctions have terms and conditions which are very liberal allowing new companies to participate in the bidding process, reduced upfront amount, adjustment of upfront amount against royalty, liberal efficiency parameters to encourage flexibility to operationalize the coal mines, transparent bidding process, 100 per cent FDI through automatic route allowed and reasonable financial terms and revenue sharing model based on National Coal Index.
Accordingly, there are no financial and technical criterion for bidders while floor price of coal mines has been set competitively at 4 per cent of revenue share. Plus, investors would have liberal exit option that could be exercised post lock-in period by just informing the nominated authority. For partially explored mines, investors could exit post completion of mandatory work programme.
The successful bidders also will have flexibility in coal production unlike past and have provision for incentives for early production and coal gasification. The winners could have 65 per cent of scheduled production on annual basis and 75 per cent of scheduled production over a block of 3 years.
There will also be complete freedom to numbers to use coal production for sale, captive consumption, sale to affiliates, coal gasification and exports. Moreover, exploitation rights for CBM and other minor minerals present in the coalfields would also be provided to miners.
Also, Security creation through mortgage over the coal mine has been allowed for scaling any financing needs. Change in control has also been allowed.
The coal mines auction process will lay strong foundation for energy security in the country by producing additional coal providing large scale employment and huge opportunities for investment in coal sector. These efforts will supplement the 01 billion tonne coal production likely from Coal India in FY23-24 and meet full requirement of domestic thermal coal.

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