Date | Nov 09, 2016:

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.

(Source: http://www.business-standard.com/)