Indian ministry has decided separate 4 MnT coal auction for non-regulated sector which may be conducted by Coal India.
To remove the ambiguity in previous coal distribution process, the ministry had decided coal linkage auction through competitive bidding for more transparency among the end users. But the policy regarding new coal linkages may take some more time to be finalized. The previously granted linkages still require justification on continue supply of coal under MoU.
A letter dated 15 Sept’15 by the ministry to CIL, stated that it has been decided that CIL may open a separate e-auction exclusively for non-power sector for quantity of 4 MnT.
The government has decided to secure 4 MnT of coal auction for non-power sectors. All MoU non-power end users can also participate in this auction with other non-power participants. On the other hand, traders are not permitted to bid in this auction.
The government is going to abolish the present system of supplying coal through MoU and tapering coal linkage mechanism beyond 30 Sept’15.This does not seem favorable for sponge iron sector. From this letter it may also be inferred that members obtaining coal through tapering linkage mechanism and paying high prices viz-a-viz other consumers will now be treated at parity.
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