CESC has got back the Sarisatolli mine through the bidding process currently underway. It got the mine at a closing bid of Rs.470 per tonne. It may be recalled that CESC was allotted this block in 1993, commencing it in 2002.
With a rated capacity of 3.5 million tonnes, it met half the annual requirements of CESC. The company lost the allocation in the wake of the Supreme Court order in September 2014 on coal block allocations. The block has so far yielded over 30 million tonnes, and CESC has had to pay Rs.900 crore as levy.
The RP-Sanjiv Goenka Group flagship, which has a licence to supply electricity to over 2.7 million consumers in a 567 square km area in and around Kolkata, operates on a cost plus-based tariff regime. And, it is likely to pass on the increase in fuel costs to the consumers. It runs three thermal power plants here while having operations in Maharashtra and Haldia.
However, the aggressive bidding for coal blocks has pushed out of the ring some other companies. City-based Usha Martin, which was operating the Kathautia block, withdrew from the bidding, saying that it had taken the deliberate decision as it felt that it was not economically justifiable for a company making steel by the direct reduction of iron route to buy mines at high prices. The mine went to Hindalco Industries Ltd. at Rs.2,860 per tonne.
