Ascertaining sufficient coal supply, MSTC conducted special coal e-auction for power producers, but received poor response.
MSTC, India’s largest foreign trading company, had conducted special e-auction on behalf of Coal India for the Indian power producers on 30 Sept’15 and 1 Oct’15.
The corporate giant offered about 5 MnT of coal for sale. According to the sources, out of the total quantity, the company succeeded to sell 2.4 MnT of coal.
Reason for poor response – ‘Higher floor price of Indigenous coal’
The floor price of material offered in the auction was much more higher than that of global prices for imported coal.
The floor price for the power producers holding PPA was the price notified by CIL, added with 20% premium. Whereas, those who have no PPA were offered to pay 40% premium, added with CIL notified prices, as decided in August.
Among all eight subsidiaries of CIL, only Mahanadi Coalfields and Northern Coalfields succeeded to sell their produced material at CIL notified prices, added with 20% premium. Whereas, Western Coalfields sold at prices fixed by CIL, added with 20% premium through MSTC platform.
Centre has planned this move to ensure coal supply to power plants, which are starved for material due to lack of coal blocks, linkages or power purchase agreement.
The participants were restricted to peg only the shortage quantity of coal required for their operation.
It should be noted that centre has set a production target of 550 MnT for CIL in FY16 and had enjoined CIL to allot 10% i.e. 55 MnT of the produced quantity through coal linkages.
Source- CIL
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