BCCL Postpones Coal E-Auction for the Second Successive Month

Bharat Coking Coal Ltd (BCCL) has decided to defer the coal sales via e-auctions due to difficult working conditions.

The company had offered a total of 166,950 MT coal in spot scheme of e-auction on 6th and 7th May’20, however, citing unavoidable circumstances, the sale has been postponed. Previously, the spot auction offering a total of 127,500 MT coal in Apr’20, was also postponed on similar grounds.

CoalMint has learnt from its reliable sources that the company has been facing issues regarding coal off-take via manual loading during lock-down. Although, Jharkhand government had no objection whatsoever, but BCCL was avoiding it for safety concerns.

While, coal supply for power and steel sector were ongoing via rail mode of dispatch; sale to the local industries was affected who prefer coal loaded onto the trucks, ultimately the decision was taken against the auctions.

Subdued Coal Sales

Another reason for the postponement could be accounted to the lower participation in the recent e-auctions, where the other subsidiaries have witnessed few takers for coal which were rather sold at a cheaper rate despite the relaxation being provided in terms of pricing and extension in date of payment.

Lower demand has brought down coal sales of various miners, with BCCL bar no exception. During Apr’20, the company’s coal dispatch of 1.03 MnT was assessed 39% lower than the corresponding production of 1.7 MnT coal, resulting in an accumulation of 2.99 MnT coal stock at the end of the month.

Staring at a storage problem for the excessive coal stock, the CIL subsidiary has significantly reduced its production levels. As on 7 May’20, coal production of 54,000 MT attained against the set target of 85,000 MT was down 5% than the daily average production of 56,666 MT recorded in Apr’20.

At present, BCCL is focusing on power plants for liquidating the excess coal stock. In order to envisage higher sales volume, the company had recently announced a price cut of 10% for the power producers across three grades of coking coal.