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Adani dominates India first commercial coal mine auctions

November 03, 2020

India’s first commercial coal mine auctions are currently underway, with the highest number of bids placed by the Adani Group. The Gujarat-based infrastructure conglomerate led by Gautam Adani bid for as many as 12 of the 19 mines that go under the hammer. Next are the Aditya Birla Group and JMS Mining with five bids each, followed by four bids from the Naveen Jindal Group.

With these auctions, India is opening up commercial coal mining to the private sector after five decades. The sector was nationalised in the 1970s. A policy change in the 1990s allowed select Indian private sector steel, cement and thermal companies to mine coal for use in their industrial units. But the mine allotments were cancelled by the Supreme Court in 2014 on grounds that they were made arbitrarily.

In 2015, India introduced competitive auctions for coal mines, but the end-use restrictions remained: winners could only use the coal in their industrial units. This year, the government amended the law to remove these restrictions and allow commercial coal mining – that is, auction winners will now be able to mine and sell coal both domestically and globally, without any restrictions.

Tim Buckley, Director of Energy Finance Studies at the Institute for Energy Economics and Financial Analysis, had ruled out participation by global firms in the auctions, citing the declining corporate and financial interest in coal, given the rising concerns over its environmental and social fallouts.

As he predicted, not a single foreign firm has placed a bid. 

[Supriya Sharma]

More: Why Adani Group has placed highest number of bids in India’s coal mine auctions

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