The success of commercial mining will hinge on the size of mines being offered, their reserve price, and the norms pertaining to the auction of mines, but the ensuing competition would enhance India’s energy security, according to industry insiders.
Opening up commercial coal mining for Indian and foreign companies in the private sector, the Cabinet Committee on Economic Affairs, on February 20, approved the methodology for auction of coal mines/blocks for sale of the commodity.
A key feature of the proposal is allowing 100% FDI in commercial mining as well as coal export. “Coal production is likely to increase in future, transforming into a competitive scenario,” said Subhashri Chaudhuri, secretary general of the Coal Consumers Association of India. “This [new norms] would be a great opportunity to overseas companies in countries where coal mining is either on the wane or has been stopped completely, but there is a need to choose companies with superior technology and competence,” according to former Coal India Ltd. chairman Partha S. Bhattacharyya.
‘Not just revenue’
Mr. Bhattacharyya said proven mining experience and core competence should get more weightage in bidder evaluation rather than mere revenue maximisation. Revenue maximisation should not be the only focus of the auction methodology. Read More