Coal India Ltd has announced that auctions for granting coal linkages to the non-power sector would be commenced shortly after the process was deferred in view of the difficult market conditions.
The company had initiated the fifth tranche in the month of Sep ’19 wherein coal sales for sponge iron and other (coking) sub-sectors were successfully carried out by the end of the year.
However, auction for remaining non-power sectors was withheld considering the drastic fall in coal demand affected by COVID-19.
It is pertinent to note that linkage auction is an annual exercise conducted by the miner in order to cater the coal requirement of non-power sector. The one-time auction is carried out in a phased manner for cement, sponge iron, captive power plants and steel industries.
CIL has informed that further development regarding the auction process would be provided through MSTC website.
Boon to the non-power sector:
Coal procurement via linkage route offers manifold benefits to the non-power sector. These auctions provide an extended period of coal lifting to the tune of 10 years.
Besides, the reserve price are fixed same as that of notified price thus yielding a cost efficiency compared to the other regular auctions.
Over the course of the five tranches till the latest auction had taken place, CIL witnessed sale of 86 mn t coal via linkage route. The most successful event was the fourth tranche held in CY ’18 where a whopping 35.35 mn t coal was booked by the customers.
Leave a Reply