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Leaders in Competitive Bidding in Coal
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Release Version # 7.0 15th June, 2015
E - Auction of Coal & Lignite Mines & Coal Linkages
Ajay Katekhaye, Research Analyst

2. Talk to the team which has extensively worked in Competitive Bidding in Coal
Shri Naresh Nautiyal
Director
Shri P K Mathur
Associate Director
Shri Jayant Savant
Vice President
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91 9096044255
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91 9766698408
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91 9325268034
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91 9503004233
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91 9766338730
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Analyst
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91 9028383518
Mining Engineer of National repute from the
Indian School of Mines, Dhanbad having a rich
experience of +50 years of all aspects in the
mining Industry.
Backed by 30+ Coal Sector Professionals
Shri S Y Wakhare
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A national Minerals Awardee & a geologist by
profession having + 40 years of Experience in
natural resources sector.
A highly experienced Mining Engineer from the
Indian School of Mines, Dhanbad having +40
years of experience in all aspects of the Mining
Sector.
An Exploration Geologist of repute with +40
years of experience and having the unique
distinction of working in most of the major coal
fields of India.
A graduate in law with +10 years of experience &
having deep inside about the regulatory
framework of the coal and mineral sector in
India.
A MBA finance having in-depth knowledge of the
coal and energy sector in India
A MBA finance with + 3 years of experience in the
coal and energy sector in India

3. Unfolding Opportunity – E Auction - Round III
Few coal blocks of Schedule II category (producing) and Schedule III category (ready
to produce) which could not be auctioned in the First & Second Round have been
put up for Auction in the Third Round.
The total Geological reserves of these 10 Blocks is 856 MT & total Extractable
reserves is ~356 MT
10 blocks announced for auction. Auction process for round III has already started from
8th June, 2015. Corporate are rushing towards fuel security
S
N
Coal Blocks State
Geo.
Reserves
Production
Capacity
Status
1 Bhaskarpara Chhatisgarh 24.69 1.00 Non-Producing
2 Sondhia Chhatisgarh 70.00 1.00 Non-Producing
3 Majra Maharashtra 31.50 0.27 Non-Producing
4 Marki Mangli-I Maharashtra 21.29 0.30 Producing
5 Marki Mangli-IV Maharashtra 3.425 0.20 Non-Producing
6 Kosar Dongargaon Maharashtra 22.63 0.30 Non-Producing
7 Parbatpur Central Jharkhand 235.71 1.00 Producing
8 Chitarpur Jharkhand 212.01 2.00 Non-Producing
9 Jamkhani Odisha 161.49 2.60 Non-Producing
10 Dongrital II Madhya Pradesh 43.27 2.90 Non-Producing
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79 95
161
447
MP MH CG OD JH
0
100
200
300
400
500
State wise Break Up of Geological Reserves
List of 10 blocks to be auctioned in the third round
In MT

4. Unfolding Opportunity – Why Participate
Why Participate
Own Coal Reserves - An Opportunity to own critical coal reserves
Enhance Fuel and Energy security for the projects of the Company & the state
Dependency on CIL Linkages – There is no security as to how much coal the Coal
India Limited (CIL) will be able to produce and supply to its Linkages.
Expensive Imports: Imported coal is an expensive bet for non-port-based Projects.
Poor Infrastructure Support – India’s railway infrastructure is badly constrained. If
Companies Import Coal to meet the unmet requirement, getting that coal from the
Port to the Plants is difficult due to Poor railway infrastructure.
Non-Regulated Sector production has suffered due to abrupt cancellation of coal
blocks following the SC judgment as they are power intensive operations .
This is the right time to participate and secure coal blocks for long term fuel security
and ensure uninterrupted coal supply to projects
Auction of coal linkages in near future would increase the risk and create tough
competition in getting coal from various sources other than the coal blocks auctioned.
Securing Coal Block through Auctioning Best Case
Auctioning of Coal Linkages Moderate Case
Coal Import Moderate Case
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5. Key Highlights of Standard Tender Document
Two Stage E-Auctioning Process
The auctioning process would be conducted by the Nominated Authority through a
Two Stage “ E- auctioning” process,
Eligibility Conditions :
For Schedule II Mines : An expenditure upto 80 % of the Total Project Cost of the
specified End-use Plant should have been made.
For Schedule III Mines : An expenditure upto 60 % of the Total Project Cost of the
specified End-use Plant should have been made.
Eligibility on the basis of coal requirement :
A bidder shall be considered eligible for bidding for the coal mine only if its
requirement of coal for specified End Use matches the reserves of the coal mines.
Extractable reserves of the Coal Mine should not exceed 150% of the annual coal
requirement for the specified End Use Plant.
Limitation on total number of Bids
With respect to one Specified End Use Plant only one Bid may be submitted for the
Coal Mine, either individually or as a part of Joint-Venture, either directly or
indirectly.
The entitlement to receive coal pursuant to such coal linkage shall stand
proportionately reduced on the requirement of coal being met from the coal mine
Utilisation of Coal
The successful Bidder shall not be permitted to use the coal extracted from the Coal
Mine for purposes other than utilization in the Specified End Use Plant.
Extracted coal in excess of requirement shall be supplied to CIL
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6. Timelines for the Third round of Sch-II & Sch-III Coal Mines Auction
Monday, 08 June 2015
Estimated Date
Monday, 08 June 2015
Monday, 22 June 2015
Wednesday, 24 June 2015
Friday, 26 June 2015
Sunday, 19 July 2015
Tuesday, 21 July 2015
Thursday, 23 July 2015
Friday, 07 August 2015
Tuesday, 11 August 2015
Monday, 17 August 2015
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Registration and Publication of notice inviting tender
Commencement of sale of Tender Document
Last date of receiving requests for Site Visit/ Land
Document Inspection
Pre-bid meeting
Last date for responses to queries by the Nominated
Authority.
Last date for sale of Tender Document
Bid Due Date.
Opening of the Technical Bid(s).
Announcement of the Technically Qualified Bidders
Start of electronic auction (Financial Bid)
End of electronic auction (Financial Bid)
Event Description

7. E-Auction of Coal Linkages
*Under Discussions & Finalization
AUCTION COAL LINKAGES IS PROPOSED TO NON REGULATED SECTOR
Government is contemplating to introduce auction of coal linkages / LoAs through
competitive bidding.
As per draft policy the auctioning of the coal linkages will be similar to the spectrum
auction where Bucket Filling Approach and Ascending Market Clearing Approach
are used.
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Bids will be invited at a price determined by the Government. If the demand exceeds the
availability, the price will be raised where some players will drop out. The Government
will keep increasing the price till such time that the demand matches the availability.
Draft Methodology
Link Quantity Offered 10 MT
Bidding Round 1
Floor Price Rs. 3000/T
Bids Received for 30 MT
Bidding Round 2
Floor Price Rs. 3500/T
Bids Received for 15 T
Bidding Round 3
Floor Price Rs. 4000/T
Bids Received for 10 MT
Result: 10 MT quantity awarded @ Rs 4000/T

8. Great Opportunity – E-Auction of Mines & Minerals
10 blocks of lignite have been identified by NLC (Neyveli Lignite Corporation) and
has been sent to Ministry of Coal (MoC) for further action regarding allocation.
Lignite, often called brown coal, is utilized in steam electric power generation & is
used in cement, bricks kilns, chemical and textile processing sector.
Nine lignite blocks are under mining lease in the state, out of which eight are being
used for power generation and one for mercantile use
Rajasthan Government is likely to auction 10 lignite blocks this fiscal as it plans to
enhance power generation capacity in the state as well as utilize its rich mineral
resources to increase revenue. Source-Economic Times
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The Ministry of Mines has prepared the rules named “The Mineral (Auction) Rules,
2015” for the provisions relating to auction of the mineral concessions as provided
for under the Mines and Minerals (Development and Regulation) Amendment Act,
2015, paving the way for auction of mines bearing minerals like iron ore, bauxite and
limestone.
In continuation of Act, Ministry of Mines has identified 199 mines containing
minerals like iron ore, bauxite and manganese ore that can be allocated through the
auction route .
27th Mar 2015
THE MINES AND MINERALS (DEVELOPMENT AND
REGULATION) AMENDMENT ACT, 2015, received assent of the
President to facilitate the auction of mines and minerals blocks.

9. Public Auctioning of Coal Mines – Journey So Far
had announced allocation of Coal Blocks through E-Auction
Route and Direct Allotment Route.
In the First & Second Round, had put up Coal Mines under
Auction and Allotment.
Out of 89 coal blocks total coal blocks so far have been unlocked, of which 29
mines have been auctioned, while 38 blocks have been allotted to public sector
companies
The companies Bid aggressively for Coal Mines for Power and claimed Zero Fuel
Cost for few Coal Mines.
204
89
69
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The remaining 127 coal mines are likely to be put for auction and allotment
in the next rounds after August - 2015
16
13
38
10
127
Round 1 Auction
Round 2 Auction
Direct Allotment
Round 3 Auction
Sep - 2015
This Research Release & more information on the coal sector is available on
our website www.axykno.com
Please log in to or website and find more such important information.

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has successfully advised for more than 30 coal blocks in India.
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Pioneered and advised Competitive Bidding for +30 PSUs / Govt. undertakings.
Strong data room of +100 coal blocks
Focused team of experts; Mining Engineers, Geologists, Mineral Economists, Exploration Experts,
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+25 Coal
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Team Capability Matrix Low Medium High
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- Team of Cross Functional Experts

11. Cutting Edge Advisory Offerings
Backed by a team of +30 Cross Functional Professional who have worked in Competitive Bidding in Coal
Deep understanding of 350 + Corporate
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/ Private Corporates.
Comprehensive One stop – Shoppe solution
provider in areas ranging:
Competition Mapping
Technical & Financial Advisory
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Key StrengthTeam Composition of Coal Sector Experts
A. Short listing of Coal Blocks
Identifying the Coal Blocks from Sch I
Robust Framework for Short listing of Blocks
B. Technical Due Diligence & Assessment
Site Visit & On Ground Truth Collection
Ranking of Blocks based on Multiple Risk Filters
C. Geological Assessment
Quality Assessment of Different Seam
Weighted Average GCV
D. Mining
Method of Mining with different Options
Mining & Auxiliary Equipment configuration
E. Logistics Assessment
Rail & Road accessibility
Determination of Logistics Costs
F. Financial Estimates
Detailed Estimation of CAPEX & OPEX
Arriving at a Bid Range from Integrated Financial Model
G. Bid Management Advisory
Analyze Bid structure, model, qualifying conditions and detailed study of bid documents
Advice Client on the bidding strategy
Cutting Edge Advisory Offerings
In house team
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