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Naveen Jindal retains richest coal block at lowest price

Racing ahead of stiff competition, Jindal Power Limited regained one of its significant de-allocated coal blocks in Chhatisgarh, Gare Palma-IV 2&3, for Rs 108 a tonne. The company has put in three bids against single bids by other technically and financially qualified bidders — Adani Power and GMR — for the set of these two blocks with end-use power generation.

The cumulative capacity of these two mines is 155 million tonnes, with an annual peak-rated capacity of 6 million tonnes, the highest among all coal blocks pit up for auction. Interestingly, the block has received the lowest bid in the auction so far.

The mine has a power plant attached to it, and the company already has power-purchase agreement with Tamil Nadu and Karnataka.

Buoyant after winning the block, the official Twitter account of Jindal Steel & Power tweeted: “Change in tides, #JPL wins back GARE PALMA IV/ 2 & 3 coal mine #WontGiveItBack”. Jindal power is a wholly owned subsidiary of Naveen Jindal-promoted JSPL.

With the bid for this block, Chhattisgarh will earn annual proceeds of Rs 1691.9 crore for the whole life of the mine. Of this, the auction amount is Rs 167 crore and Rs 1,523.8 crore. Annual revenue from the auction price will be Rs 67.5 crore and that from royalty will be Rs 61.25 crore.

The government is re-allocating the coal blocks cancelled after a Supreme Court ruling in August last year. The e-auction of 42 coal blocks started from Feb 14 and will be on till March 3.

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