<article><p class="lead">A sharp increase in Covid-19 cases in India may delay an upcoming auction of coal blocks for commercial mining, weighing on India's broader goal to boost domestic output and slash imports in the coming years.</p><p>The federal coal ministry has postponed a pre-bid conference scheduled for today to 26 April, without giving a reason. The sharp rise in coronavirus cases in the last few weeks has dented responses from the industry to the <a href="https://direct.argusmedia.com/newsandanalysis/article/2200331">auction launched last month</a>. This will have also weighed on attendance for the pre-bid conference at a time when several officials at the ministry have been diagnosed with Covid-19 and may have missed the event.</p><p>The rise in fresh Covid-19 infections and the government's focus on containing the pandemic may hamper the schedule of the auction for 67 blocks, which was initially planned to be completed by August. The sharp rise in Covid-19 cases has "disrupted everything - travel, meetings, et cetera," a senior ministry official said, underscoring the repercussions of the pandemic on the auction round.</p><p>The mines listed to be auctioned are spread across six key coal-bearing states, including Maharashtra, which recently announced <a href="https://direct.argusmedia.com/newsandanalysis/article/2205090">restrictions until 1 May</a> to curb the spread of Covid-19. This was followed by other states, including Delhi, announcing stringent measures to contain the outbreak.</p><p>The curbs in parts of India have not yet stalled economic activity, but stricter rules may weigh on industrial operations in the coming weeks. National coal-fired generation is holding steady after rising for seven straight months on a year-on-year basis, and enquiries for seaborne coal are continuing amid demand for pre-monsoon cargoes. But market participants are treading cautiously, especially given that last year's March-June coronavirus lockdown dented industrial activity and curtailed demand for imported coal.</p><p>Thermal coal imports remain under pressure <a href="https://direct.argusmedia.com/newsandanalysis/article/2176187">after contracting in 2020</a>, with high freight rates and a spike in seaborne prices dampening demand.</p><p>The curbs last year also delayed the maiden auction round of coal blocks for commercial mining. The auction, which concluded at the end of last year, <a href="https://direct.argusmedia.com/newsandanalysis/article/2158335">failed to generate interest</a> from foreign firms and overseas investors. Domestic conglomerates, including Adani Enterprises and Jindal Steel, were among those that won 19 blocks out of the 38 that were offered under the tender for commercial mining.</p><p>Delhi thinks both overseas and domestic firms will be interested in the auction given that coal is still a vital source of energy in the country, accounting for more than 77pc of its electricity generation in the 2020-21 financial year that ended on 31 March.</p><p class="bylines"><i>By Saurabh Chaturvedi</i></p></article>
