<div>The government on Monday (23 March) is believed to have alloted the three cancelled coal blocks, for which JSPL and Balco had emerged as the highest bidders in the recently concluded auctions, to state-owned miner CIL.<br /><br />"Three coal blocks - Gare Palma IV/1, IV 2 and IV 3 under Schedule II mines (blocks under production) have been today alloted to Coal India Ltd. JSPL and Balco had been successful bidders for these blocks," a highly placed source said.<br /><br />Shares in Jindal Steel and Power Ltd were heading towards their biggest daily loss in almost two years on Monday, hit by concerns over the company's ability to feed its power plants after the rejection of its bids for three coal mines auctioned by the government.<br /><br />Stocks of the company, controlled by former lawmaker Naveen Jindal, fell as much as 14.9 percent before paring some losses to trade down 8.1 percent at 2:27 p.m. on Monday, while the benchmark BSE Sensex was fell 0.15 percent.<br /><br /><br />The development comes amid Jindal Steel and Power Ltd today moving the Delhi High Court against the decision of the Centre to cancel the coal blocks saying that the company apprehends that the blocks might be allocated to someone else as the government is "moving very fast".<br /><br />The source said the government decided promptly to allot the blocks to Coal India as the Supreme Court had allowed companies to continue mining till March 31 in blocks where coal production had already started.<br /><br />Total reserves of the three mines amount to 313.68 MT.<br /><br />The government had cancelled four blocks including Tara which falls under Schedule III (ready for production) category on March 20 saying the bids were undervalued and it will take a final call on these soon after deliberations.<br /><br />The four coal blocks whose bids were rejected include Gare IV/2, Gare Palma IV/3 and Tara coal blocks in Chhattisgarh in which JSPL had emerged as the highest bidder and Gare Palma IV/1 mine for which Bharat Aluminium Company (Balco) had emerged as highest bidder.<br /><br />Government re-examined the bids for nine coal blocks in the recently held auction amid reports that some bidders could have indulged in cartelisation to keep the prices low for these mines.<br /><br />While JSPL is yet to respond to the government move, Balco declined to comment on the development.<br /><br />"Bids for Gare Palma IV/1, IV/2, IV/3 and Tara coal blocks not accepted," Coal Secretary Anil Swarup had earlier tweeted.<br /><br />However, bids for five other blocks which were accepted are Marki Mangli III mine, (with B S Ispat as the successful bidder), Mandla South mine (Jaypee Cement), Usha Martin Brinda and Sasai mines (Usha Martin), Dumri mine, (Hindalco Industries) and Meral mine (Trimula Industries).<br /><br />Through auctioning just 33 blocks, the government has garnered over Rs 2 lakh crore, surpassing the Rs 1.86 lakh crore loss estimated earlier by government auditor CAG for having given away mines to companies without bidding. The Supreme Court had cancelled the alloted mines leading to the auctions.<br /><br /><a href="http://www.businessworld.in/news/business/energy-and-power/jindal-steel-to-go-to-court-over-coal-bid-cancellation/1785103/page-1.html"><strong>Taking Govt To Court</strong></a><br />Separately on Monday, a company source told Reuters that Jindal Steel, which said it was "puzzled" by the government's decision over the weekend to reject the bids, will take the government to court over the cancellations.<br /><br />The absence of coal blocks for the company's power business leaves its 3.4 gigawatt (GW) of capacity near-stranded with linkage of only 1.2 GW in place, analysts at brokerage Kotak Institutional Equities said in a report to clients.<br /><br />"Limited linkage and the absence of captive coal blocks would make imports an expensive and logistically difficult choice for fuel," the report added.<br /><br />The loss of the coal mines will have an adverse impact on the load factor of Jindal Steel's power plants in Chhattisgarh where the mines in question are located, chief executive Ravi Uppal said in a television interview.<br /><br />"The present government is working so hard to see all the stalled projects become functional. Here we have a project which is functioning and I see no reason that anything should be done which will cause a functioning project to become a stalled project," Uppal told ET Now news channel.<br /><br />India rejected winning bids for four of 33 coal mines put up for auction in the past two months, after the coal ministry had examined nine blocks whose surprise low bids prompted the designation "outliers".<br /><br />The move to re-examine "price discrepancies" drew criticism from industry watchers, with some experts saying reassessing the auctions after the posting of the highest bids sends the wrong signal to the market ahead of more auctions.<br /><br />"Unfair to even suggest that the bids were low, infact the bids were substantially above the base prices set by the government," chairman Naveen Jindal said in a Twitter post on Saturday.</div>
