Coal India Ltd has finalized the schedule for auction of coal linkages under Tranche V for Sponge Iron sub-sector which is set begin from 18 Dec’19.
Coal sales under linkage auction are aimed to provide a long-term fuel supply agreement for non-power sectors, wherein the successful bidder can procure uninterrupted supplies for 5 years which can be further extended by another 5 years on mutual agreement.
For the current scheme of auction earmarked specifically for Sponge Iron manufacturers, CIL has offered 4,697,000 MT coal from its 6 coal producing subsidiaries. Coal volume offered in 17 lots from various source and pertaining to different grades is envisaged to be sold via competitive bidding which will took place during 18-24 Dec’19.
Highest coal volume in the auction was offered from MCL noted at 2,230,000 MT followed by SECL which had put forward 1,560,000 MT for sale. No coal was offered from BCCL and NECL in the current auction.
| Date | Subsidiary Name | Primary Source | Grade | Size | Notified Price | Secondary Source* | Offer |
| 18 Dec’19 | SECL | Vijay West UG | G5 | 100-250 mm | 2737 | Gayatri UG | 200,000 |
| 18 Dec’19 | CCL | North Urimari (Birsa) OCP | G8 | ROM | 1757 | Urimari OCP | 50,000 |
| 18 Dec’19 | ECL | Hariazam | G5 | STM (-250 mm) | 3007 | N.A. | 12,000 |
| 19 Dec’19 | MCL | Hingula OCP | G13 | -100 mm | 980 | Balaram OCP (G13) | 1,000,000 |
| 19 Dec’19 | SECL | Manikpur OC | G13 | 100-250 mm | 980 | Mahan II OC | 250,000 |
| 19 Dec’19 | CCL | Religara OCP | G7 | ROM | 2311 | N/A | 50,000 |
| 20 Dec’19 | NCL | Block-B | G5 | STM | 3007 | N/A | 200,000 |
| 20 Dec’19 | MCL | Garjangbahal OCP | G15 | -100 mm | 708 | N/A | 500,000 |
| 20 Dec’19 | CCL | Karma OCP | G6 | ROM | 2524 | N/A | 70,000 |
| 21 Dec’19 | WCL | Pouni-II OC | G11 | CruRom(-100 mm) | 1914 | Makardhokra-I OC | 20,000 |
| 21 Dec’19 | CCL | Urimari OCP | G8 | ROM | 1757 | North Urimari (Birsa) OCP | 50,000 |
| 21 Dec’19 | MCL | Bhubaneswari OCP | G12 | -100 mm | 1063 | Ananta OCP | 300,000 |
| 23 Dec’19 | ECL | Linked siding of Jhanjra area | G4 | STM (-100 mm) | 3270 | N/A | 55,000 |
| 23 Dec’19 | SECL | Gevra OC | G11 | 100-250 mm | 1145 | Kusmunda OC | 1,110,000 |
| 23 Dec’19 | MCL | Spur 9 Siding | G13 | -100 mm | 980 | Spur 7 & 8 Sidings (G 13) | 150,000 |
| 24 Dec’19 | CCL | Amrapali OCP | G11 | ROM/(-)100mm | 1145 | Magadh OCP | 400,000 |
| 24 Dec’19 | MCL | Belpahar OCP | G14 | -100 mm | 897 | Garjangbahal OCP (G15) | 280,000 |
| Total | 4,697,000 | ||||||
Abbreviations used: ROM- Run of Mine | STM-Steam | CruRom- Crushed ROM
*Secondary source has been provided as a back-up mine in the event of force majeure
Quantity in MT
Prices in INR/MT
Apart from assuring long-term coal supplies to the end-users, linkage auction also provide a cost benefit in terms of price at which the coal is procured.
Notably, reserve price for coal in linkage auction is set at the same notified price as specified by CIL. Whereas, in case of traditional spot/exclusive auctions, the reserve price is set percentage higher than the rate specified by individual subsidiaries above the notified price.
Earlier, CIL had initiated Tranche V of coal linkage auction for non-regulated sector, begininng with auction for Steel (coking) sub-sector wherein 5 MnT was offered. Going by the previous trend, linkage auctions for Cement, CPP, others (non-coking) & others (coking) sub-sectors are likely to be followed in the coming days.
CIL’s auction for sponge iron had witnessed 6.37 MnT coal sold in the previous tranche, wherein the company had fetched 38.93% premium over the reserve price set in the auction.
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