Central Coalfields Ltd (CCL), a subsidiary of Coal India Ltd (CIL) operating out of Jharkhand, has revised the reserve price of coal in the spot auction by increasing the upper cap on the notified price to 30%.
The latest round of sales comprises the third phase of the spot auctions, to be held by the company in FY’22, which has resumed after a gap of four months. In the previous round, the upper cap was fixed at 10% over the notified price.
It is important to note that CIL has a fixed price across grades termed as the “notified price” upon which individual subsidiaries apply an add-on charge (upper cap) in terms of a percentage to fix the reserve price in the auctions.
Out of the seven coal subsidiaries currently active in auction sales, four have kept the upper cap fixed at 20% for the spot scheme. In particular, the remaining three subsidiaries, located in the eastern region, charge a higher upper cap, the highest recorded at 40% which is levied by Bharat Coking Coal Ltd (BCCL).
Grade-wise offers in upcoming auction
CCL has offered a bulk of 776,500 tonnes (t) of coal, comprising of coking and non-coking grades which also include a single lot of washed coking coal from the Rajrappa colliery. These would feature for sale via the spot auctions on 22 and 24 Dec’21.
Quantity in Metric Tonne | Prices in INR/t
However, washed coking coal has been taken out of the ambit of the latest revision, whose reserve price is set at the same level as the notified price.
During the first eight months of FY’22 (Apr-Nov’21), CCL’s coal offerings via the spot auction were down 83% y-o-y to 1.98 mn t. Moreover, the volume is also the lowest amongst the various subsidiaries assessed in the period.
The upcoming auction is likely to fetch higher price realisation due to the upward revision in the reserve prices, which would also be supported by the active demand for domestic coal from the non-power sector.
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