Government has allotted coal blocks for Tata Sons – Sasol joint-venture and for Jindal Steel and Power for their coal conversion projects. These projects will convert coal into liquid petroleum and their capacity is estimated at 160,000 barrels of liquid petroleum a day with an investment of $ 18 billion. Ministry will soon award prospecting licenses for these coal blocks.
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Planning commission has increased the quantum of coal sold through e-auction at 20% of total coal production in the country. Through E-auction, anyone can purchase coal at market price, which is 60-70% high above the subsidized price. So, it may not make much impact at current high price. E-Auction will find takers, when there is slim margin between subsidized price and market price.
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GMDC, which has signed a host of MoUs with various companies is keen to pick up stake in project in lieu of supply of raw materials. Companies like Sunflag Iron & Steel, Nagpur, BLA Coke, Global LDA of Mozambique, Hindustan-Dorr Oliver, Saurashtra Fuels have inked agreements with GMDC for supply of raw materials like bauxite, silica, fluorspar, sand and limestone. These companies have planned to invest Rs. 15000 million each in Gujarat for setting up coke oven plants. Aryan Coal and Adani Enterprises are planning to invest Rs.600 million each to set up coal washeries and they too will get raw materials from GMDC. GMDC may pick-up upto 26% of stake in these projects.
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Rebuffed by the lack of progress by the private sector with the allotted coal blocks, the minister of state for coal declared that govt. may consider cancelling. With 190 blocks given to private sector only few of the players have started work. It seems, that the ministry has also issued show-cause notice. Minerals & Metals (Development & Regulation) bill which is to tabled shortly in parliament will bring in changes in competitive bidding.
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