A jolt to Jindal

The company’s share price surged in February after it won auctions for the Gare Palma 2 and 3 coal blocks it was forced to surrender to the Indian government last year.

Yet bids for these blocks, along with Gare Palma 1 and the Tara coal block that Jindal made the biggest bid for, were not accepted with the decision revealed by Indian Department of Coal secretary Anil Swarup via twitter on Saturday.

A spokesperson for subsidiary Jindal Power said the company came to know of this decision “past midnight”.

“The reason cited being ‘the highest bidder doesn’t reflect fair value’, which we fail to understand as our bid was much below the ceiling price during the reverse auction process.

“We had followed a consistent and prudent bidding strategy throughout the Coal Block Auction process, with a serious long term business perspective.”

Winning back the Gare Palma 2 and 3 blocks in the central state of Chhattisgarh was a priority for Jindal as their deposits are needed to feed the company’s power plants which host 2.8 gigawtts capacity.

“We are puzzled with the decision and would make our best efforts to engage in a dialogue with the Coal Ministry and government authorities to present the facts,” Jindal said.

“As per policy of Chattisgarh state government, a power plant with a captive coal mine needs to supply 7.5% of net power generated to government of Chattisgarh at energy charge.”

Coal India 2.0

On Sunday Indian Coal Minister Piyush Goyal reportedly said importing coal was unjustified as the country sat on reserves that totalled 300 billion tonnes.

“On the occasion, Goyal hailed Western Coalfields Limited, a Coal India subsidiary, for pulling the loss-making company out of red and producing 38 million tonne of coal,”Press Trust of India reported.

“He said WCL will open a new mine every month.”