Sarda Energy Secures Raigarh Coal Mine in 10th e-Auction Round

The ongoing 10th round of coal mine auctions for commercial mining continues to attract attention, with Sarda Energy and Minerals Ltd (SEML) and S M Steels and Power Ltd emerging as bidders on the second day. These auctions, focused at strengthening India’s coal production, are part of the government’s larger initiative to increase private sector participation in mining operations.

The 10th round of coal mine auctions for commercial mining was launched on June 21, 2024 offering a total of nine blocks for bidding. 

Second-Day Highlights

Sarda Energy emerged as the preferred bidder for a coal mine in Chhattisgarh’s Raigarh district, which holds geological reserves of 102.268 million tonnes (MT). Meanwhile, S M Steels and Power secured a block in Jharkhand with reserves of 77.9 MT. Together, these two blocks are projected to generate an annual revenue of Rs.339.06 crore at their peak-rated capacity (PRC).

The operationalisation of these mines will attract a capital investment of approximately Rs.315 crore and create 2,839 jobs, according to a statement from the Ministry of Coal.

First-Day Summary

On the first day of the auction, five blocks were awarded to companies such as NLC India, ACC, and JSW Energy Utkal. NLC India and JSW Energy won blocks in Odisha, while ACC secured one in Madhya Pradesh. Two additional winners were Mineware Advisors Pvt Ltd and Shreeji Nuravi Coal Mining and Trading Pvt Ltd.

These five mines have a combined geological reserve of 2,630.77 MT, with a cumulative PRC of 12 million tonnes per annum (MTPA). Notably, one block is fully explored, while the remaining four are partially explored.

Sarda Energy and Minerals Ltd (SEML) shares are currently trading at Rs.441.20, up 6.57% today, 73.12% year-to-date, and 85.73% over the past year.

Conclusion: The auction results bring out the rising interest of private companies in coal mining. For SEML, acquiring the Raigarh coal block is huge as it will help expand their operations, while the broader auction process shows potential for private investment to reshape the country’s coal sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.