UPDATE 1-Investors fret as India defends reopening coal mine bids – by Krishna N. Das (Reuters India – March 17, 2015)


(Reuters) – India’s coal ministry said it will decide this week the fate of nine winning mine bids it is re-examining to rule out any price discrepancies, despite criticism that its move to reopen some of the tenders will hurt business sentiment.

The government, which last month started auctioning off coal mine sites after a court said a previous method of awarding concessions was illegal, is re-examining “outlier” bids for the 33 mines auctioned so far, Coal Secretary Anil Swarup said.

The winning bids for the nine mines were the highest in their individual auctions, but were considered low when compared with the winning bids for other similar blocks.

“We are not even looking at somebody doing wrong,” Swarup told Reuters on Tuesday. “We are looking at whether the price that was quoted is good enough for the government or not, and whether we could get a better price.”

Swarup said if any discrepancy is found, the mines may be re-auctioned, given to states or handed over to government-owned Coal India Ltd. This has left some companies, including Jindal Steel and Power Ltd, uncertain as to the status of what had appeared to be winning bids in the auctions.

Shares of Jindal Steel, controlled by billionaire Naveen Jindal and which had placed the highest bids for two of the blocks under question, fell as much as 18 percent to a month-low on speculation it would not be awarded the mines.

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