Nagpur | May 23, 2016: Having scaled up its production and left with as much as eight million tonnes of coal lying unused at the mines' pitheads, Western Coalfields Limited ( WCL ) has now slashed the rates for e-auction sales.
Apart from selling coal at fixed notified price under fuel supply agreements (FSAs) to industries and power plants, there is also a system of competitive bidding. Part of the coal is set aside for e-auction and consumers wanting over and above the quotas or not having a FSA, go for this mode.
Till now the reserve price for auction was fixed at 20% above the notified price. Now, the notified rates itself will be the reserve price.
This is for the first time that the rates for e-auction have been reduced. As per the plans of coal ministry under BJP regime, WCL has scaled up its targets for coal production. Though it was also required to bring the company out of red.
As against 44.8 tonnes last year, this year WCL is moving towards a target of 48 million tonnes. With a mine opened each month so far, 15 new projects have begun with two more slated in the month of June. However, if this has done away with the shortage of coal, the demand has also come down especially in power sector. This has substantially reduced the offtake.
WCL is now left with eight million tonnes of coal waiting to be lifted from the mines. Recently, it also come up with a new system of leaving the coal exposed in the mines itself, and extract it as and when the demand is raised. "Leaving extracted coal at the mines' pitheads leads to the risk of catching fire, so it is better to leave the mineral exposed in the mines itself," said a senior officials in WCL.
A press release issued by WCL says reducing e-auction price is aimed to provide comfort to consumers. Since it is a major reduction it will bring back consumers from Maharashtra to WCL, as they were so far procuring coal from other companies outside the state.
Notified price of WCL has been generally 20% higher than that of the other coal companies due to the adverse mining conditions here. E-auction was done by setting a reserve price at 20% over and above the notified rate.
(Source: http://timesofindia.indiatimes.com/)