Coal India Ltd (CIL) has sanctioned a historical mandate that would make it possible to re-sell coal procured via its auction schemes for export purposes.
Carrying out an amendment in Clause 11.1 of the spot auction document, the company has allowed use of coal for exports which was earlier limited for use only within the country.
However, it has been clarified that the onus of complying with any government guidelines regarding coal exports would lie solely with the buyer/exporter.
The provision would be applicable for coal procured via spot and special spot e-auction windows. Exclusive and special forward auction schemes, through which buyers are entitled to only meet the coal demand of the non-power and power sectors respectively, have been kept barred from this provision.
It is important to note that CIL, through its various subsidiaries, conducts regular auctions in order to meet the coal requirements of its customers. The spot and special spot windows especially cater to the entire category of coal consumers, including traders who can re-sell the procured coal in the open market.
Despite having abundant coal reserves, India has been a net importer of the fuel. Most of its production is consumed domestically. Notably, a moderate volume of 1.047 million tonnes (mn t) was exported during FY ’21, as per data provided by the Coal Controller’s Organisation (CCO).
The revised norm would encourage major players to participate and explore the exports market. In turn, it would bolster CIL’s coal sales via the auction route.
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