Centre drops e-auction of Jamkhani mine

New Delhi: The government has cancelled the proposed e-auction of Jamkhani coal block in Odisha which was scheduled to go under the hammer tomorrow as the last mine in the second tranche of auctions.

The decision was taken in view of the matter pending with the Court.

"We have cancelled proposed auction of Jamkhani block in Odisha tomorrow under the second tranche in view of the pending court case concerning it. The Delhi High Court has asked us to postpone the auction so we withdrew the block from the proposed sale tomorrow," an official told PTI.

As many as 15 mines were put in the list for the second leg of coal auctions. Fourteen mines have already been sold.

The Jamkhani block in Odisha has 115 million tonnes of extractable reserves and was previously allotted to Bhushan Ltd. Balco, Bhushan Power and Steel, Godawari Natural Resources, Hindalco, JSW Steel, Sesa Sterlite and JSPL are among the firms vying for it.

Bhushan, along with Utkal Coal Ltd, Monnet Ispat and Energy Ltd as well as Jayaswal Neco Industries Ltd (JNIL), have challenged the Coal Ministry's decision to club all other sectors, except power, under one category for the coal mines auction.

The Centre today told the Delhi High Court that it will withdraw Jhamkhani coal mine in Odisha from the ongoing auction process.

The Delhi High Court bench said as a result of the withdrawal of the block, Bhushan's petition has become infructuous and "is disposed of".

The companies in their respective pleas have challenged auction rules of two-stage bidding in which 50 per cent of the players are eliminated in round one, besides multiple bidding by a company.

They have claimed that the 50 per cent elimination criteria combined with the classification of all sectors, except power, under unregulated sector, was "wrong".

They have contended that due to "wrong" classification, core sectors like iron and steel, which are to be protected as per 2014 coal ordinance, are losing out to aluminium companies in the auction.

However, as per the list of the 33 blocks auctioned so far 12 were for power sector and out of remaining 33, nine mines have gone to the iron and steel sector under schedule II and III categories.

The government has so far auctioned 33 blocks which will fetch it over Rs two lakh crore -- surpassing CAG's estimate of Rs 1.86 lakh crore loss due to allocating mines without auction during the previous regimes.

"The transparent e-auction of ...blocks, has already yielded potential e-auction revenues, royalties and upfront payments of Rs 2.07 lakh crores, which is far in excess of CAG loss estimate of Rs 1.86 lakh crore," Coal Minister Piyush Goyal has said.

The allotment of 204 coal mines were cancelled following a Supreme Court order, which led to the government announcing the ongoing auction.