Mumbai: India’s first auction of coal mines has presented an opportunity for smaller regional companies that have grabbed the opportunity, and some mines, although analysts question the ability of some of them to pay up the huge amounts they have bid.

On Monday, bids for the Lohari block closed at Rs.2,438 per tonne, the highest bid made in the second round of auctions of so-called Schedule III category coal mines (those ready to produce but underdeveloped, with even the land having to be acquired in some cases). This bid came from a relatively unknown company, Araanya Mines Pvt. Ltd. Mint could not independently ascertain the provenance of Araanya Mines or contact it.

The second phase of the e-auction of 11 coal mines proved to be a bonanza for mineral-rich states, whose revenues increased to Rs 2.05 lakh crore from Rs 1.35 lakh crore in the first phase. Out of the received bids worth Rs 71,027 crore for 30 years (mines' life), Rs 59,736 crore is towards royalty and the rest is the auction amount.

The second phase was almost similar to the first with sector majors grabbing richer coal blocks at high price. The only exception was Jindal with the lowest bid to get a rich coal block with power generation as end-use. While operational coal blocks were auctioned in the first phase, the second phase auctioned off about-to-produce mines.

Even as it closed February with a 12 per cent rate of growth, surpassing its monthly target, achieving the annual production target of 507 million tonne may remain elusive for Coal India Ltd (CIL), available indications show.

Enquiries revealed that CIL may just be able to scrape past the 490-million tonne mark by around a couple of million tonne. It closed 2013-14 with 462 million tonne and indications are that this year the figure may touch just 492 million tonne against the targeted 507 million tonne. The company, which has been tasked to raise 1,000 million tonne coal by 2020, has produced 436.9 million tonne between April and February 2014-15, against the targeted 450.1 million tonne.

Shares of Coal India Ltd tumbled nearly 6 per cent amid massive selling by investors as the stock went ex-dividend today.

The stock fell by 5.68 per cent to Rs 372.25 on the BSE. The blue-chip scrip was the biggest loser among the 30-Sensex constituents.

As Coal India Ltd (CIL) prepares to double its production capabilities on a priority basis, equipment makers, both domestic and global, are sniffing big opportunities including possible joint ventures with Coal India.

Equipment suppliers like BEML, Heavy Engineering Corp, L&T and global players like Caterpillar, Joy Global, Komatsu, Atlas Copco, Leibherr and Peabody have shown interest.

Mumbai: State-owned Coal India Ltd will boost capital expenditure by 15% in 2015-16 to increase production to 550 million tonnes, a jump of over 8%.

The world’s biggest coal producer proposes to invest around Rs.6,000 crore in 2015-16 in capital expenditure, it told the stock exchanges on Friday.

Aditya Birla group firm Hindalco Industries has won the Gare Palma IV/5 mine in Chhattisgarh by outbidding companies like BALCO, Sesa Sterlite, Ambuja Cements, which were also vying for the same block.

Gare Palma IV/5 mine was won by Hindaco Industries at Rs 3,502 per tonne. The mine was put on offer yesterday and the bidding for the block lasted for over 12 hours, a senior Coal Ministry official said.

Gautam Adani-promoted Adani Power has joined the race for coal block reallocation with all its might. Adani Power has made 11 bids for six of a total 19 blocks being auctioned under the second phase of the coal block allocation process. These blocks belong to Schedule-III, about-to-produce mines without any associated end-use infrastructure.

The technical bids for these 19 blocks was opened on Sunday. Naveen Jindal's Jindal Steel & Power, the biggest loser as the fallout of a Supreme Court's judgment in August 2014, closely followed with eight bids, four each for two blocks.

The government on Friday suffered a setback in the coal block auction process as the high court here provided relief to several companies, which were disqualified from participating in the bidding process on one or the other ground.

The hearing on the issue was conducted in phases till late this evening before two separate benches, which heard the petitions filed by Jindal Steel and Power Ltd (JSPL) and Jindal Power Ltd (JPL), Sesa Sterlite, Sarda Energy and Minerals Ltd, Usha-Martin, Monet Ispat, Utkal Coal Ltd and Jayaswal Neco Industries Ltd.

Hit by increased expenses, Coal India Ltd (CIL) has recorded a 16 per cent fall in its consolidated net profit to Rs 3,262 crore for the December quarter. The net profit in the year-ago quarter was Rs 3,894 crore.

The net sales during the quarter under review stood at Rs 17,763 crore - a five per cent rise over Rs 16,928 crore in the year-ago period.

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