Odisha grants 50 years mining lease in favour of 15 firms
The state government has executed lease deeds in favour of at least 15 firms including state-owned Odisha Mining Corporation for allocation of mining blocks for 50 years.
These 15 firms are among the 60 developers against whom the letters of intent were issued by the Centre for grant of mining lease before implementation of the New Mines and Minerals Development and Regulation (MMDR) Act-2015. According to the Act, lease deeds should be executed by January 11 following which the applications would be lapsed.
The allocated blocks include graphite, gem stone, bauxite, cat's eye, granite, quartz, iron ore and manganese.
Pradhan Industries, B K Bansal, Bajrangilal Gupta, OMC, Sanjukta Jain, Bharat Precious Stone, Om Prakash Jain, B K Bansal, Manikeswari Minerals, Prakash Industries, K C Pradhan, Balasore Alloys, Neelachal Ispat Nigam Limited, Rudrasen Sindhu, Sree Metaliks Limited and National Enterprises are the 15 firms who got mining lease for 50 years.
Applications for grant of mining lease of the remaining 43 blocks are likely to be lapsed as they could not sign the lease deed with the state government due to lack of required statutory clearances. Majority of the applications lack forest and environment clearance.
"We can't say about fate of the remaining blocks as some of the applicants have moved to the courts. We will wait for the court to pronounce its verdicts before taking any call on these blocks," said a senior officer in the state mining department.
Union mines secretary Balvinder Kumar during his meeting with chief secretary A P Padhi in November had asked the state government to initiate action for executing lease deeds with the project approvals in view of the growing demand of ore (raw material) by mineral-based industries. He had also sent a series of letters to the chief secretary in this regard.
Prakash Ind up 9%, Odisha govt grants 50 years mining lease
Share price of Prakash Industries touched 52-week high of Rs 68.90, rises 9 percent intraday Thursday as Odisha government has granted mining lease in favor of company for 50 years. "The Odisha government executed and registered a mining lease of iron ore and manganese ore in favour of the company in Keonjhar district for a period of 50 years," as per company release. "As per the plan, geological reserves are around 9.9 million tonnes. The mine is expected to be developed in the next 6 months and thereafter the iron ore production from the mine would be utilized for captive purpose," it added. With this captive sourcing, the operating margin and profitability of the company would improve significantly.
NTPC approves Rs 1,000 crore investment for Dulanga mining project
State-run power giant NTPC today said its board has approved an investment of Rs 1,053.41 crore for Dulanga coal mining project with rated production of 7 million tonnes per annum.
"The Board of Directors of the company has accorded investment approval for Dulanga Coal Mining Project having rated production capacity of 7 MTPA at an appraised estimated cost of Rs 1053.41 crore," NTPC informed BSE today.
NTPC plans sale of foreign currency bonds to mop up 500 million euros
NTPC, the country’s biggest power generation company, plans to sell foreign currency denominated bonds worth at least 500 million euros within the next two weeks, said people familiar with the proposed issue.
The state-owned utility will conduct road shows in Europe starting Monday. The bonds will be offered as part of a programme to borrow $4 billion to meet funding requirements.
NTPC is expected to spend as much as $8 billion on capital expenditure over the next two years as it gears up to bid for ultra-mega power plants – of 4 gigawatt (GW) capacity each – when they are offered by the government and on attempts to acquire state-owned thermal power plants.
The company is said to have mandated Barclays, Citigroup, Standard Chartered, Axis Bank and Bank of Tokyo Mitsubishi UFJ to arrange the bond sale.
NTPC declined to comment on the matter.
“The company plans to diversify its borrowing resources globally while rising US Treasury yields have made borrowing a bit expensive for Indian borrowers in the US,” a person familiar with the company’s thinking said.
Fitch assigned a BBB- (expected) rating on the proposed issue on Wednesday, citing NTPC’s dominant market position as one of the key factors.
“The final rating is contingent upon the receipt of final documents conforming to information already received,” Fitch said in a note, without sharing details.
“The company may gain 100-150 basis points (1-1.5 percentage point borrowing cost advantage) as they plan to borrow from Europe instead of US,” said a banker with knowledge of the matter.
“NTPC has managed its counterparty risks well, despite most of NTPC’s customers being state utilities with weak financial profiles. NTPC’s strong bargaining position - as the lowest-cost electricity producer and the supplier of a large share of electricity bought by the state utilities - helps to ensure timely payments,” Fitch analysts Rachna Jain and Muralidharan R noted.
NTPC accounts for about 16% of the country’s installed power generation capacity and about a quarter of the electricity produced. India’s installed power generation capacity stood at 319 GW at the end of December, according to the Central Electricity Authority.
The company posted a net profit of more than Rs 10,000 crore on revenue of about Rs 71,000 crore for the year ended March 31, 2016.
NTPC to take over Rajasthan’s Chhabra power plant
The Rajasthan government on Wednesday night said that it has agreed to transfer its 1,000 megawatt (MW) Chhabra thermal power plant to NTPC Ltd, a central government power utility, in an asset-for-equity deal.
AES India, Adani Power, Tata Power-ICICI were in race for acquiring the Rajasthan power project, Mint had reported earlier on Wednesday.
A statement from the Rajasthan government said that eventually two more units of 660 MW each will be transferred to NTPC after their completion. The statement did not mention the valuation of the assets or the equity it would get in NTPC.
“After transfer of Chhabra thermal power plant to NTPC, the state government will receive equity as per latest valuation, and the losses being incurred from Chhabra will stop after transfer of the plant and debt liabilities of the state government shall also be reduced,” said the statement.
After the agreement with NTPC was reached, power minister Piyush Goyal tweeted that the deal will help improve efficiency in power generation from the Chhabra power plants and result in lower tariff for consumers.
The deal was given effect through a tripartite agreement among NTPC, Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RVUN), the state government’s power generation utility, and power trading firm Rajasthan Urja Vikas Nigam Ltd (RUVNL) in the presence of chief minister Vasundhara Raje in Jaipur.
According to the state government, the four units of the Chhabra power plant with a total capacity of 1000 MW project were commissioned between 2010 and 2014 at a cost of Rs5,835 crore. The two 660 MW projects to be transferred have an estimated cost of more than Rs7,900 crore
As on 31 March 2016, central government held 69.96% in NTPC, while banks and financial institutions held 14.03% and foreign institutional investors 10.75% among institutional shareholders.
Coal India goes big on digital, to sell 10% output via e-auctions
Coal India Ltd (CIL) is planning to sell 10% of its annual output in the next three years via e-auction, for which it is inviting bids from service providers.
State-owned MSTC Ltd and mjunction Ltd—jointly owned by Tata Steel and the Steel Authority of India Ltd (SAIL) — are the two existing service providers.
CIL has been conducting its e-auctions through the two service providers since the process started in 2005.
The country's near-monopoly coal miner is set to sell 235 million tonne (mt) through the process during this year that comes to a yearly average of 78 mt. It had sold 51 mt and 80 mt in fiscals 2015 and 2016, respectively.
"Considering about 10% of the estimated coal production of CIL to be sold through e-auction process during the next three years, it is estimated that about 235 million tonnes of coal and coal products shall be sold through e-auction by CIL. This is an indicative position only. The quantity to be sold through e-auction would be reviewed from time to time by Ministry of Coal," CIL said in the tender document.
CIL had dispatched coal of about 489.98 mt during 2014-15 and 534.62 mt during 2015-16. During fiscal 2015, about 60.38 mt was offered for sale through e-auction out of which about 51.16 mt got allocated.
About 125.52 mt was offered for sale through e-auction in fiscal 2016, of which about 79.80 mt got finally sold.
"Coal India Ltd desires to appoint two Service Providers. On qualification, the bidders will be awarded the work in the ratio 60:40 on the basis of events between the two qualified L-1 and L-2 Bidders in that order at L-1 rate," the bid document said.
While CIL has been thinking of raising the number of its service providers and has been open to recruiting other services providers, responses weren't encouraging.
It is likely that the coal miner would continue with these two. mjunction officials refused to comment on this as it may impact future business relations.
While initially resulting in windfall gains, profits from e-auctions for CIL have been under steady pressure.
CIL's realisation from e-auction has gone down, from a peak of 116% premium over notified prices in October 2014 to 28% in July 2016.
HC indicates early decision in Jindal Power coal auction case
Jindal Power Ltd has got a minor breather from the Delhi High Court in the matter of the two coal blocks it had bid for in the e-auction of 2015; the bid was rejected over the low rate quoted.
The bank guarantee given for the two blocks is due to expire by the middle of next month. JPL has asked the HC to let it withdraw the guarantee. The amounts for Tara (in Bengal) and Gare Palma IV/2&3 (in Jharkhand) are Rs 13.73 crore and Rs 11.82 crore, respectively.
The e-auction of blocks in 2015 was held to re-allocate those cancelled earlier by the Supreme Court. JPL had won these two by way of the lowest bid; both blocks were for power generation. However, the ministry of coal did not approve, saying the amounts were too little. JPL petitioned the HC and the court had in September 2015 reserved its verdict.
The matter came before the HC on Wednesday as an interim application filed by Jindal Power, seeking release of the bank guarantees, scheduled to expire on February 15 and 20, respectively. Judge Badar Durrez Ahmed asked senior advocate Parag Tripathi, appearing on behalf of Jindal, if the guarantees could be extended till February 28, such that the main matter could be adjudicated without any interference or change in status. As the Jindal counsel accepted the suggestion without contest, the court recorded his undertaking and passed the order appropriately.
Government officials say with this development, they are looking forward to disposal of the case by February-end.
Bharat Aluminium, whose bid faced a similar fate, had withdrawn from the case last year and given up on the block in question.
Warm Regards
Anurag Singal
Sr Manager –Business Development
Essel Mining & Industries Ltd
14th Floor, Industry House
10,Camac Street –Kol-71
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