COAL IN­DIA RAISES AUC­TION AIM TO STAVE OFF IM­PORTS

COAL IN­DIA IS OF­FER­ING DIS­COUNTS OF 35 PER CENT FOR LOWER GRADES AND 20 PER CENT FOR MID­DLE GRADES TO POWER PLANTS

Resource Digest - - RESOURCE DIGEST -

Coal In­dia has dra­mat­i­cally in­creased the tar­get for sell­ing coal through auc­tion to 120 mil­lion tonnes (mt) this fi­nan­cial year, which it hopes will help in im­port sub­sti­tu­tion and meet elec­tric­ity needs. Last year, the miner had sold 66 mt of coal through auc­tion.

Coal sec­re­tary Anil Swarup had pre­vi­ously in­di­cated that next fi­nan­cial year on­wards, gov­ern­ment-owned power plants would go for 10 per cent do­mes­tic coal and pri­vate play­ers will be en­cour­aged to use more lo­cal fuel.

Coal In­dia has been auc­tion­ing 10 mt of coal (eight mt for reg­u­lated sec­tor and two mt for non-reg­u­lated sec­tor) ev­ery month through auc­tion to meet power de­mands of en­ti­ties in­clud­ing power plants that ei­ther don’t have fuel sup­ply agree­ments with the state-owned coal miner or have lost their mines due to a Supreme Court or­der.

This fi­nan­cial year, re­al­i­sa­tions so far have been 22 per cent higher than the no­ti­fied price. Last fi­nan­cial year, re­al­i­sa­tions were 33 per cent higher than the no­ti­fied price.

But, the sit­u­a­tion is chang­ing now. The coal stocks both at Coal In­dia and the power plants are com­ing down and with the global prices on a rise, we ex­pect pri­vate power pro­duc­ers to buy more coal from the auc­tions,” an of­fi­cial said.

Coal In­dia is also of­fer­ing dis­counts of 35 per cent for lower grades and 20 per cent for mid­dle grades to power plants.

ICICI Se­cu­ri­ties said Septem­ber e-auc­tion vol­umes came in at 20.5 mt, with re­al­i­sa­tion of Rs 1,570 per tonne, which is down by 28.1 per cent year-on-year. Coal In­dia ac­counts for 80 per cent of In­dia’s to­tal coal pro­duc­tion and has a do­mes­tic mar­ket share of 65 per cent.

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