NEW DELHI (CU)_Amid growing interest in global efforts to minimise greenhouse gas emissions, the coal industry has been among the sectors which have been severely impacted, producing low profit margins for investors. Therefore, in a bid to make India a net coal importer, Prime Minister Narendra Modi removed restrictions on the end-use of the fossil fuel and offered financial incentives to private sector organisations involved in the industry.
Nevertheless, only 19 out of 67 coal mines which were recently up for sale received bids, signalling little investor appetite for the sector. Following the deadline for submission of technical bids on Friday (9 July), the Ministry of Coal said in a statement that of the 19 mines, only 8 received more than one bid.
India has the fourth largest coal reserves in the world and is the second largest producer, consumer and importer of the fossil fuel. The industry in the South Asian nation is largely governed by state-run Coal India Ltd. While New Delhi has already launched a renewables policy which is expected to increase the country’s green energy capacity more than four-fold by the end of the decade, however, at the moment, coal accounts for over 70 per cent of the country’s power generation.
Some of the top Indian businesses involved in the commodity sector, such as Adani Power, Vedanta Ltd and Hindalco Industries were among those who submitted bids, while no foreign companies took part in the auction.
It was only last year that the first coal mining auction for the private sector in India was conducted with no restrictions on end-use. At the time, nearly half of the 38 mines which were put up for sale received no bids.
