The Indian government has deferred the auction of five coking coal blocks in the eastern Indian state of Jharkhand, a government official said on Monday, July 17.
The official said that the five coking coal blocks have been reserved for allocation to steel companies. The auction process has been deferred and no new timeline had been set for its resumption, the official added.
Although no official reason has been cited for deferment of the auction of the coal blocks, industry sources said that this was done as the government had concerns that the auction would not receive a favorable response from bidders or that valuations submitted in the course of competitive bidding would be poor.
The sources said that in the government’s assessment, considering the poor financial of most domestic steel producers and the large debt liabilities on their balance sheets, they would not be able to make the large investments necessary to secure raw material assets through competitive bidding.