Govt targets coal block auction by Dec

The government has set a target to auction at least six coal blocks to private firms by December.

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"The Coal Ministry has set an internal target to auction the coal blocks by December," said an official source.

He said that at least six explored blocks with estimated reserves of over 2,000 million tonne would be put up for auction, without giving details of the mines involved.

Coal Minister Sriprakash Jaiswal had said last month that the coal block auction is likely to be held in the next two months.

The Cabinet had recently approved the methodology for auctioning coal blocks, providing for upfront and production- linked payments and benchmarking of coal sale prices.

Coal blocks will be put up for auction after Environment Ministry reviews them and bidders have to agree to a minimum work programme, an official statement had said recently.

The policy provides for production-linked payment on a rupee per tonne basis, plus a basic upfront payment of 10 percent of the intrinsic value of the coal block.

The intrinsic value will be calculated on the basis of net present value (NPV) of the block arrived at through the discounted cash flow (DCF) method, the statement had said.

The government had earlier said that exploration activities in identified blocks are at an advanced stage and are likely to be completed soon. They will be auctioned under the Competitive Bidding of the Coal Mines Rules, 2012.

The government allocated 14 coal mines to central and state public sector units, including four to NTPC, in July.

It had planned to auction 54 coal blocks with total estimated reserves of about 18 billion tonne.