Singareni Collieries Company Ltd (SCCL) has decided to conduct the seventh tranche of coal linkage auctions, for the non-power sector.
The company has offered 2.01 mn t of coal to the various sub-sectors, which is around 46% higher than 1.375 mn t that was put on sale in the previous tranche. However, the coal volume earmarked for the captive power plants and other sub-sectors has been slashed.
Auctions under the seventh tranche will commence from 13 Sept’21 with the first two days reserved for the cement sector which has been offered the highest volume.
The latest round of sale also marks the return of the sponge iron sector into the auction fray which was excluded in the previous round.
Grade-wise coal offers
The company has specifically proposed coal having high calorific value (G5-G9) for the cement as well as sponge iron sectors. On the other hand, the lower grades, falling in the G11-G13 band are being offered for the captive power units.
The auction provides coal at a subsidised rate where the reserve price is same as the notified coal price, unlike the regular auctions where the reserve price is set at an upper cap of 20% over the notified price.
Another important aspect of these auctions is that these offer fuel supply agreements for a minimum of five years which warrants a long-term coal supply.
The latest auctions are likely to gain traction from the domestic players, especially at a time when imported prices have reached unprecedented levels. As per CoalMint’s assessment, offers for South African 5,500 NAR coal, ex-Gangavaram, have increased by nearly 65% since the start of CY’21, and are currently assessed at INR 9,400/t.
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