Bharat Coking Coal Ltd (BCCL) has come up with the third phase of its special forward auction for FY ’22 in a bid to grab higher coal allocation amid revival in electricity consumption.
Interestingly, these auctions earmarked especially for the power producers have failed to register booking of a single lot of coal in the past five occasions. In fact, allocation of 100,000 tonnes of coal was last seen in the auction held during Jun ’20.
Grade-wise coal offers
The latest round of auctions scheduled on 31 Jul ’21 features 1,062,000 t of coal, including a mixed bag of coking and non-coking grades which are offered at a discounted price compared to the traditional spot auctions.
The company sets an upper cap of 35% on the notified coal price for fixing the reserve coal price in spot auctions.
However, reserve price for washery grades W-V and W-VI coal are offered at a subsidised rate of INR 2,427/t and INR 2,254/t respectively, which is equivalent to the corresponding notified price in the special forward auction.
Similarly, in case of non-coking coal, the upper cap on the notified price is fixed at 10% thereby offering these coals at a reduced reserve price.
Moreover, additional discount of 20% has been offered on the reserve price for coal rejects in order to incite higher coal sales.
Lower sales a concern
BCCL, in particular, has been the worst performing subsidiary of Coal India (CIL) in terms of coal allocation against the offered quantity. During the first quarter of FY ’22 (Apr-Jun ’21), the company has managed to sell 357,780 t out of the bulk volume of 6,822,512 t put up for sale.
Nonetheless, with a gradual revival in power demand and fall in interest for imports due to soaring prices in the global market, the company is expected to witness moderate improvement in the latest round of auctions.
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