Vedanta to bid for coal mines to meet energy needs
The Dollar Business Bureau
Vedanta Ltd, the world’s leading natural resources company, is planning to buy coal mines by bidding in auctions, as the mining major is seeks meet the energy requirements of its aluminium plants.
“Numerous initiatives are being taken to meet our coal requirements. We will source our overall coal mix from low-cost imports and auctioned coal to optimise the cost in financial year 2016-17. We are also looking to optimise our coal mix further by securing linkage coal through the auction route,” Vedanta said.
The government on its part is yet to decide on the dates for holding the fourth round of coal mine auctions that were cancelled in December last year.
The company further said that prices of imported coal dropped 20 percent in 2015-16. Power takes up 40 percent of the input cost in manufacturing aluminium and is a major issue for the metal producers.
Balco, an arm of Vedanta group, had won the blocks of Chotia and Gare Palma IV/1, in the state of Chhattisgarh, in the first round of auctions in February last year. As a group, Vedanta had bid for the maximum number of 14 blocks. However, Gare Palma IV/1, for which Balco was the highest bidder, got annulled and awarded to the state-owned Coal India Ltd (CIL).
Balco and Sesa Sterlite, the Vedanta Group firms, took part in the second tranche of auctions in March 2015. Vedanta and Balco also bid for the third round of auctions that took place in August 2015. In December last year, the government cancelled the process for the fourth round of auctions due to poor response from bidders due to adverse market conditions and lower commodity prices. The fourth tranche of auction for mines was due to be held between January 18-22, 2016. The earlier three rounds would have created more than Rs.3 lakh crore from the auction of 30 coal mines.