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JSPL hopeful of getting Gare Palma coal block: VR Sharma

In the October to December quarter (Q3), we will be surpassing all our records.

ET Now|
Updated: Dec 06, 2019, 12.06 PM IST
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Yesterday the government declared results for five mines and the Gare Palma 4/1 decision has not yet been taken. We are very much confident that the decision will be taken in our favour, says VR Sharma, MD, JSPL. Excerpts from an interview with ETNOW.

Have you received any notification from the ministry regarding the delay in allocation?
Yesterday the government declared resuts for five mines and the Gare Palma IV decision has not yet been taken. We are very much confident that the decision will be taken in our favour because everything was done through e-auction and we were the highest bidders. We are very hopeful that either today or Monday, we would get the confirmation from Government of India.

Do you have any official intimation stating the same?
No, there cannot be any official intimation. If there is an official intimation, there is going to be a confirmation. They have neither rejected nor have they kept it at hold and nor have they have commented on this mine. There would be some internal discussion in the ministry and we are very much confident and hopeful that either today or on Monday, we would get it.

I did not mean official intimation saying that Gare Palma goes to you...
It is not an information even that it has not gone to us.

Does it happen that more than one list of coal blocks allocated in one round of e-auction is released?
It is not a school or university result that it has to come out on the same day. So for each and every allocation, mines and assets, there may be some internal decisions because Coal India is already operating this mine and there must be some dialogues and discussions within the ministry. Everything has been done as per the Government of India’s requirements for the e-auction and the forward auction. We participated in it and we were declared as H1 bidders. There is no reason that government would decline our stake on this mine because we are H1.

So, we will wait for the next list. But back in 2015, the coal ministry thought that Balco’s bid of 1585 for Gare Palma was too low. Yours is at Rs 230 a tonne?
Throughout the country, whenever the mines have been put on auction, they never have a reserve price like Rs 1,500 or Rs 1,200 or Rs 1,700. The government is free to put a minimum price tag at Rs 1,500, if this was the case. Since they have been operating this mines for the last five years, they must have seen that the value of this mine is Rs 1,500. Otherwise, the government could have been very pragmatic and fixed the minimum price Rs 1,500.

Secondly the option was open to everybody. Balco did not participate this time. If this was so lucrative, than Balco should have participated at Rs 1,500 again. In five years, the government has produced more than 5 million tonne out of the mine. That is a value loss for everybody. Five years back, Balco was considering it for Rs 1,500 per tonne. They must have done due diligence before participating in any other mine and that is why they did not participate this time.

In case you name does not feature in the second list, what are the implications for JSPL?
No big impact. There are two things in mining business; because we are sitting at a hub of more than 60 billion tonne of coal and there are more than 11 mines operating nearby. In India, out of 11 mines, 8 belong to the Government of India. So, we are getting coal whenever we need and now coal production has been increased as well.

We have been participating in the auctions and we get whatever quantity of coal we need. There is problem only in the rainy season when it was monsoon because we have very heavy floods, the mines were full of water. But for the last one-and-a-half month, the production is very good. Yesterday, there was an auction of 400,000 tonnes of coal just 25 km from our plant and we have got 100,000 coal from them.

So there is no problem and there is no dearth of coal now. so there is no issue, there will not be any impact on production or profitability. Our production in the last two months have been wonderful and in the October to December quarter (Q3), we will be surpassing all our records.

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