South Eastern Coalfields Ltd (SECL), the largest coal producing subsidiary of CIL has recently concluded its special forward e-auction for coal sales to the power sector, which only entitles power plants to participate in.
The sales carried out as the fifth phase of the special forward e-auction was concluded on 14 Mar’19, which allow bidders a longer validity period of lifting and also to decide the monthly allocation desired against the successful quantity won in the process.
Current scheme of auction was envisaged for three month period starting from Mar’19 (Mar’19-May’19).
SECL had followed the same pattern in terms of source and grade of coal being offered in the auction, but, the volume of 1,120,000 MT coal this term was lower from 1,528,000 MT floated in the previous round.
| Colliery Name | Grade | Base Price | Average Bid Price | Quantity Offered | Quantity Sold |
| Gare Palema IV/1 | G12 | 975 | 1639.67 | 30,000 | 30,000 |
| G15 | 649 | 653.29 | 30,000 | 28,000 | |
| G17 | 492 | 535.07 | 300,000 | 300,000 | |
| Gare Palema IV/2 & 3 | G12 | 975 | 1030 | 40,000 | 40,000 |
| G14 | 823 | 826.67 | 120,000 | 120,000 | |
| G16 | 555 | 595.13 | 600,000 | 600,000 | |
| Total | 1,120,000 | 1,118,000 | |||
Source: CoalMint Reseach
Quantity in MnT
Price in INR/MT
In terms of performance, overall sale in the auction was particularly good, where only 2,000 MT of coal remain unsold. However, the auction had fetched a premium of 3% over the base price which was quiet low in comparison to the SECL’s previous auctions.
SECL had garnered average sales price of INR 614.82/MT against an average reserve price of INR 594.45/MT.
Sales of G12 grade of coal offered from Gare Palema IV/1 fetched highest premium among the rest of the lot. The same grade of coal offered from Gare Palema IV/2 & 3 had only recorded 6% increase over the base price.
Highest coal quantity was offered for G16 and G17, which had recorded 7% and 9% premium respectively. While sales of the remaining grades G14 and G15 were concluded close to their respective base prices.
The entire coal quantity sold in the auction was distributed among 8 power companies, with Jindal Power taking the highest volume of 444,000 MT. RKM Powergen (158,000 MT), TRN Energy (156,000 MT), SKS Power(148,000 MT) and DB Power (144,000 MT) were among the other major coal receivers in the auction.
Irregularity in coal e-auctions:
The need to supply more coal to the power stations has been the utmost priority of CIL and its subsidiaries, which is the reason for improper conduct of coal auctions this year.
Coal supplied under e-auction has fallen y-o-y in FY19.
The pertaining issue has also taken its toll on SECL’s auction schedule.
It is to be noted that, the fifth phase of special forward coal sales was the first auction to be conducted since 29 Jan’19, in case of SECL.
As a matter of fact, SECL has conducted monthly spot e-auction only 4 times since July last year. While it’s exclusive e-auction was last conducted on Jul’18.
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