Jindal Power gets two blocks in Chhattisgarh for Rs 108 a tonne; JSPL stock up 26%
Gare Palma-IV/2&3 blocks (set aside for the power sector), clubbed for bidding, went to JPL for Rs 108 a tonne, the lowest bid for any block so far.
The government has so far closed bids for 13 blocks, with companies bidding as high as Rs 3,502 a tonne for Gare Palma IV/5.
Hindalco bagged the IV/5 block (earmarked for the steel sector).
JPL put in three bids against one by Adani Power and GMR, even as the Jindal group has taken the government to court on the auction and compensation provided in the Coal Mines (Special Provisions) Ordinance, 2014.
The total capacity of these two mines is 155 million tones, with an annual peak rated capacity of six million tonnes, the highest among the blocks on auction.
The mine comes with an operational power plant and the company has signed power-purchase agreements with Tamil Nadu and Karnataka.
After winning the block, Jindal Steel and Power Ltd (JSPL) tweeted, “Change in tides, #JPL wins back GARE PALMA IV/ 2 & 3 coal mine #WontGiveItBack.”
JPL is the wholly owned subsidiary of JSPL. Subsequently, JSPL’s stock shot up 25.6 per cent on the BSE exchange on Thursday.
Chhattisgarh would earn proceeds of Rs 1,692 crore (Rs 16.92 billion) over the life of the mine, including Rs 1,524 crore (Rs 15.24 billion) in royalty.
Annual revenue from the auction would be Rs 67.5 crore (Rs 675 million) and from royalty, Rs 61.25 crore (Rs 612.5 million).
In all the operational coal blocks that it lost, JSPL has submitted more than one bid.
For its most attractive and also the controversial blocks, Gare Palma IV/1&7, JSPL has given four bids.
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Business Standard had reported in December, when the re-allocation started, in the e-auctions, the blocks hit by controversy most were likely to witness the stiffest fight from former owners.
The other such winner is Hindalco that has won two blocks till now. JSPL is yet to compete for Gare Palma IV/1, which it owned earlier and for which it has put four bids against five bidders.
JSPL was one of the worst hit when in August last year, the Supreme Court ordered cancellation of captive coal blocks allocated over the past two decades.
The company had nine blocks, of which three totalling 100 million tonnes were operational.
Of the total penalty of Rs 7,000 crore (Rs 70 billion) imposed on owners for operational blocks, JSPL had paid the highest, Rs 3,000 crore (Rs 30 billion).
The company had also filed a petition in the Delhi High Court against the provisions in the second coal ordinance regarding determination of compensation to be paid by prior allottees.
Of the 42 operational coal blocks cancelled, JSPL owned one of the largest coal reserves in Chhattisgarh, the Gare Palma IV, which had also achieved the highest production by the time Supreme Court verdict arrived.
Naveen Jindal is also one of the accused in the coal block allocation scam.
The company recently cancelled its $10-billion coal-to-diesel project in Odisha, supposed to get coal from one of the cancelled mines of 1.5-billion-tonne capacity.
THE MINE: GARE PALMA-IV / 2&3
Image: Naveen Jindal; Photograph: Rediff Archives