NEW DELHI | July 04, 2017: The fifth round of coal block auctions that was set to start next week is in doldrums, having received tepid interest from steel makers. Bad financial position of most steel companies is being seen as the reason behind the lukewarm response.

Some of the coal blocks offered have not received even the minimum number of three bids required for reverse e-auction, sources said. A senior coal ministry official said the fifth tranche of mine auctions was carried at the steel ministry’s insistence.

The coal ministry had last year annulled the fourth round of coal mine auctions due to lack of adequate number of bidders. The coal ministry had in April this year offered six blocks — five in Jharkhand and one in Madhya Pradesh — for production of iron and steel.

The blocks include Rohne OCP with estimated reserves of 8 million tonnes and Rabodih with 2.5 million tonnes of coal. Sources said in all 4-5 firms including JSW Steel and Tata Steel have evinced interest in the fifth round of coal auctions. Interest is discouraging even for lucrative mines like Rohne, Rabodih and Urtan North coal block in Madhya Pradesh.

The Central Bureau of Investigation has filed a chargesheet against Naveen Jindal-led Jindal SteelBSE -0.12 % & Power Ltd, alleging cheating and criminal conspiracy by misrepresenting facts for securing the Urtan North mine in the earlier screening committee route of allocations. Steel companies dominate the list of 12 most stressed loan cases being pursued under the insolvency and bankruptcy code.

The list includes five steel companies, including Essar Steel, Bhushan Steel, Bhushan Power & Steel, Monnet Ispat and Electrosteel Steels. Most of these five companies have been referred by the lenders to the National Company Law Tribunal.

JSPL, a prominent player with most number of captive coal blocks before the Supreme Court de-allocated 204 mine leases, did not bid for coal blocks in the fifth auction tranche.

The last date for technical bid submission for the latest round of auctions was May 22. The coal ministry is examining the technical bids and is expected to take a final call by next Monday. The conduct of reverse electronic auction was scheduled from next Tuesday.

(Source: http://economictimes.indiatimes.com/)