Bogged down by the tepid response at the coal auctions, the Coal Ministry has decided to temporarily suspend the coal auction practice until demand becomes strong enough to justify resumption of the auctions.
The ministry has eventually come to the conclusion that the current time is not right for the auctions to help in disposing off the coal production in the country that is outstripping demand.
The ministry had earlier set a production target of 1 billion ton by 2020 in view of the growing power industry in the country. During the time of formulation of the coal production target, demand for coal from the power segment was forecasted to grow at 8-9%; but, the growth rate has been much lower only at 4%.
In the current situation, power plants are having excess coal inventories, leading to weakening of demand for coal.
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