CIL’s yearly coal auction instead of once in every five year for unregulated sectors, has received green signal by the Indian Coal Ministry with promised grade clarification in future.
Earlier proposal to permit CIL’s annual coal auction for unregulated sectors, might get the permission by the Indian Coal Ministry. However, the government is still evaluating pros and cons of the annual auction. The final model of the auction will be submitted by the Coal Ministry by end of the month. The ministry is also working on the auction mechanism, which will handle the issues arising in auction related to Coal grade variation.
The county’s steel, cement and other unregulated sectors will participate in this auction, where the final product price is not regulated by the government. The yearly coal auction may be based on a price model that includes a price adjustment formula to manage CIL’s input cost, as the government is to replace the old methodology with new.
The Indian government is also planning a special purpose vehicle (SPV) among the CIL, railways and state government to bring three large railway projects in Jharkhande, Odisha & Chhattisgarh. Under this SPV, Coal India will hold majority stakes about 64%, the railway will hold 26% and the rest will go to state government. This project will helps to bring extra coal from logistically constrained areas within the states.
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