Coal India Ltd. (CIL) has made a swift return to the auction route after temporarily suspending coal sales in order to replenish stocks at power plants.
The mining giant had asked its subsidiaries to refrain from conducting auctions, with the exception being the special forward scheme earmarked only for power producers.
However, in a recent development, Mahanadi Coalfields Ltd. (MCL) in Odisha has decided to sell 5.56 mn t of coal through a series of auctions which are likely to reduce the burden on the non-power sector.
It is important to note that MCL has been the largest coal producing subsidiary, with total production in 2021 recorded at 82.29 mn t as on 25 Oct’21. Besides, the company is also equipped with a surplus inventory of 12.75 mn t, which is the highest among CIL subsidiaries.
*Quantity in Million Tonne | Data compiled as on 25 Oct’21
Auction schedule
MCL will commence auction sales with the exclusive scheme earmarked for the non-power sector. The auction scheduled on 3 Nov offers 3.2 mn t of coal for sale against a lifting period of six months valid till Apr’22.
*Quantity in Million Tonne
This will be followed by coal sales of 2.36 mn t scheduled under the spot e-auction scheme to be held on 5 Nov.
The said auction, open to all coal consumers, is expected to ease the coal procurement of the end-user industry whose supplies have been curtailed in the wake of the coal crisis at power plants.
Notably, CIL coal dispatches to the non-power sector had fallen 21%, m-o-m, to 8.04 mn t in Sept. On the other hand, dispatches to the power sector increased by 5%, m-o-m, to 40.38 mn t in Sept.
Adding to the plight of coal consumers, rising seaborne coal prices has made imports unviable.
With coal stocks at power plants on the path towards gradual recovery, more subsidiaries of CIL are expected to follow suit by increasing the frequency of auctions going forward.
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