The government annulled the process for fourth round of coal block auctions, scheduled for the next month, on account of poor response from bidders in sectors like steel as well as depressed commodity prices and adverse market conditions.
The government had last month kick-started the process to auction nine blocks for sectors like iron and steel, cement and captive power plants.
“We have not got sufficient number of bids to carry on with the coal block auctions. We have received 15 bids for nine blocks... so in view of this, we had to annul the process,” Coal Secretary,Anil Swarup, told reporters here on Wednesday.
Mr Swarup said the coal mines to be auctioned were earmarked for non-regulated sectors like iron and steel, cement and captive power plants, which have been impacted due to adverse market conditions.
He said it appears that due to slackness in demand and the pressure in the steel and aluminum industry, which consumes most of the coal within the country, there were not many bids.
“As of now it appears that demand or financial commitment that they have to make (bidders from steel etc sector) in terms of acquiring these mines... they may not be in a position to do so because of the general condition of the market,” he said.
The secretary said the government will wait for the right time for the auction of these mines.
“We will look at the market situation and offer again.
Right now it appears that in general commodity prices are depressed so are the coal prices... companies that would have bid are not financially strong at this point of time,” he said.
The fourth round of mines auction was slated for January 18-22. The previous three rounds of auction generated proceeds of more than Rs.three lakh crore, which would be realised over 30 years by states where the mines are located.
