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<p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">In a hurry to mitigate an energy crisis, the Centre is forcing Coal India Ltd (CIL) to appoint private contract miners and auction five captive coal blocks, all before the election dates are announced and the model code of conduct kicks in.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Industry experts say the Centre&rsquo;s urgency now is almost like what it did nine years back when an emergency plan to deal with the energy crisis landed it in an unprecedented mess.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The proposal to have a contract miner (Mine Developer and Operator, or MDO) has not made much headway due to stiff resistance from CIL and the Director General of Mine Safety (DGMS) on sharing responsibility. The Centre has asked Central Mine Planning and Design Institute (CMPDI) to float tenders for auctioning the blocks, latest by February 5.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The decision to go in for an auction has been taken ignoring grumblings from CMPDI and its consultant CRISIL over the lack of preparation and grey areas. CIL&rsquo;s wholly-owned subsidiary CMPDI has been asked to play anchor role on behalf of the government.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><strong>Captive Block Details</strong><br /> It has been reported on January 25 that five assets, including three coking (metallurgical) coal and two thermal (steam) coal reserves, will be auctioned in February.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The coking coal reserves blocks are in East Bokaro of Jharkhand and may produce a total of 60 million tonnes (MT) over a 25 year period.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The two thermal coal assets are in Ranigunj, West Bengal, and North Karanpura, Jharkhand . The Ranigunj asset is estimated to produce 0.7 MT a year and opencast production is pegged at 1.5 MT coal.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Successful bidders have to pay an estimated INR 45 crore upfront and the bid value will be calculated on per tonne of production. The earnest money will be forfeited if the allottee fails to develop the block within seven years of getting all clearances and acquiring land.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Experts wonder whether the auction will be successful, considering the small size of the assets, the steep entry barriers and overall poor sentiments. They also think the outlook for the MDO scheme is not much better.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Source-On Request</span></span></span></p>