InvestorQ : How will companies like Coal India, Hindalco and Vedanta benefit from the Coal auctions announced by the government?
Deepa Salunkhe made post

How will companies like Coal India, Hindalco and Vedanta benefit from the Coal auctions announced by the government?

Answer
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Juvina Maggie answered.
4 months ago


The Indian government is going ahead with its next round of coal block auctions on June 11. Nearly 50 commercial mines will go under the hammer on that date. The government has already approved a methodology for commercial mining of coal on a revenue sharing basis. The idea is to make coal production attractive in India and to reduce the dependence on coal imports. The floor price will be 4% revenue share and miners can bid in multiples of 50 basis points till 10% and in multiples of 25 basis points above 10%. There are no restrictions on the sale of coal. For Coal India, there will be more competition. However, for aluminium companies like Vedanta, Jindal and Hindalco with their own mines, this should be a major positive.