KOLKATA (miningweekly.com) - The Indian government is likely to offer 20 coal blocks, with combined estimated reserves of three-billion tonnes, for the third round of auction to private investors with coal end-use projects.

Indications available from officials in the Coal Ministry hinted that in order to hasten investments in coal-dependent projects, participation norms for the third round of auctions would be relaxed.

A number of large coal-based projects in various stages of completion were being held up by a lack of coal linkages, and promoters, including their bankers, had slowed down funding, with the government, through relaxation of norms, intending to fast-track these projects and ensure their early completion, the officials added.

In the first two rounds of auction, it had been mandatory for participants to have completed a minimum 80% of investment in coal-based projects in various industries in order to qualify to bid for almost-ready-to-operate coal reserves put on the block.

However, the Coal Ministry was now in favour of reducing the mandatory minimum completed investments in projects to 60% to woo private investments in the coal mining sector, the officials said.

It was pointed out that since the next lot of coal blocks to be auctioned had not yet reached the ready-to-operate stage and would still have to await various mandatory regulatory clearances, it would be necessary to relax investment norms for participants to entice them to participate in the auctions.

While the list of 20 coal blocks was yet to be officially announced, sources said that they were likely to be mostly in the eastern provinces of Odisha, Jharkhand and West Bengal, with a few in the central province of Chhattisgarh and Maharashtra, in western region. About 10 blocks would be reserved for thermal power generation projects.

The Coal Ministry, however, has not set any timeline for the completion of the second round of coal block auction but the process could commence in the current month.

As things stood now, the government had successfully auctioned 33 coal blocks to various user industries and allocated 38 blocks to various entities owned and controlled by federal and provincial governments.