The Coal Ministry has rejected a Jindal Steel & Power Ltd’s (JSPL) bid for a captive coal block in Chhattisgarh, sources said. The ministry sources confirmed CNBC-TV18 that the allotment of the Gare Palma IV/I to JSPL has been rejected in public interest.

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The company had emerged as the highest bidder for the coal block with a bid price of Rs 230 per tonne, a premium of 53 percent over reserve price of Rs 150/tonne.

On December 13, the ministry said that all other mines awarded to the successful bidders in the auctions held in the first week of November except Gare Palma. The coal block would have helped JSPL’s EBIDTA (earnings before interest, taxes, depreciation, and amortisation) to rise by about Rs 500-900 crore. At 12:50 pm, shares of JSPL fell 1.48 percent to Rs 136.70 on the BSE.

Jindal Steel & Power, however, said that it was not aware of the rejection of the bid for Gare Pelma IV/1 captive mine.

JSPL has participated in the transparent e-auction process and submitted the closing bid of Rs 230/tonne and declared as the highest bidder for Gare Pelma IV/1 , it said. Reserve price for the mine was Rs 150/tonne and closing bid price was 55 percent higher than reserve price and third-highest in the 6 coal blocks auctioned in the recent tranche.

V R Sharma, managing director, JSPL, said: “We believe government will respect it’s own transparent process and decide fairly with regards to e-auction of the coal block. The reserve price was decided by government after considering various factors. Still as a responsible corporate house we will respect government’s decision."

"The end use for this block was JSPL’s Raigarh sponge iron plant which is running in full capacity and there is no dearth of coal for the same. For blast furnaces, we are already importing coking coal. Hence there is no adverse effect on our production," said Sharma.

First Published:Dec 16, 2019 1:23 PM IST