Balco plea to accept winning bid for Chhattisgarh mine rejected

The government has rejected a plea of Bharat Aluminium Company (Balco), a Vedanta group firm, to accept its winning bid for an auctioned coal mine in Chhattisgarh.

The government had in March rejected bid by Balco citing low prices and handed over the mine to Coal India. The company had moved Delhi High Court.

The court had asked the government to consider Balco's plea afresh while appointing Coal India as a temporary custodian.

The company had in its plea told the coal ministry that the coal in the Gare Palma IV/1 mine was of inferior quality than that mentioned in the bid documents.

The company had also said that the block received less value as it did not have any coal evacuation system. It also cited that the winning company for the block would have to take host of regulatory approvals to mine fresh patches of the Gare Palma IV/1 block.

The coal ministry has replied that the gross calorific value of the coal in the mine is accurate as it is based on data made available by the Central Mine Planning and Design Institute. It has also junked the firm's other two arguments, a source said.

Balco had in its petition in Delhi High Court stated that the coal block was required for the company's 600-MW captive power plant attached to its 3 lakh tonnes per annum aluminium plant entailing a total investment of Rs 7,000 crore.

It said that delay in awarding the mine was resulting in production loss of 16,438 tonnes per day leading to revenue loss of Rs 2.85 crore per day to the firm.

The company had also said that mining of the block would yield revenue of Rs 950 crore annually to the government against Rs 60 crore if the mines are handed over to Coal India.

Balco had submitted best bid at a price of Rs 1,585 per tonne for Gare Palma IV/1, while Hindalco bagged another mine in the same Gare Palma stretch at Rs 3,502 a tonne and another Gare Palma IV/4 at Rs 3,001 per tonne.