KOLKATA | Nov 15, 2016: Coal India sold 7 million tonnes of coal, or 35% of the quantity on offer in an e-auction, at a floor price that was 20% higher than listed prices for non-power users. Traders as well as power producers with or without supply commitments from Coal India were allowed to bid in the auction.

“Most of the coal was sold near the floor price and we have been able to sell 7 million tonnes till now. The e-auction is still on and we hope to sell the entire volume of 20 million tonnes soon,” said a senior Coal India official. State-owned Coal India has sold about 70 million tonnes of coal through spot and forward e-auctions in the first seven months of this financial year. It plans to sell another 50 million tonnes in the remaining five months, for a total of 120 million tonnes through this route.

“We are first taking care of power producers that have supply contracts from us, following which coal is being offered at auctions,” the official said.

The bulk of Coal India’s income comes from e-auctions, which fetch a price higher than the price notified for coal that’s meant for power and non-power consumers. The company’s output was 538.75 million tonnes of coal in 2015-16.

Earnings from e-auctions had declined with the fall in global coal prices. During the first quarter of the current financial year, the average realisation from e-auctions dipped 28% to Rs 1,570 per tonne from Rs 2,184 per tonne a year earlier, even though more coal was sold.

International coal prices started to firm up in the second quarter and are expected to help Coal India garner better prices from auctions. However, the adequate availability of coal is expected to exert downward pressure on e-auction prices.

(Source: http://economictimes.indiatimes.com/)