India: CIL resumes linkage auctions; offers 3.2 mn t coal for cement sector

Coal India Ltd (CIL) has decided to resume auctions of coal linkages by starting a fresh round of sales for the cement sector.

Sales via the linkage route are one-time auction conducted annually for the various non-power sectors that warrant long-term fuel supply for a minimum of five years.

Recently, the Singareni Collieries Company Ltd (SCCL) commenced a fresh tranche of linkage auctions for the non-power sector.

However, in the latest auction, CIL has resumed sales for the remaining sub-sectors which were left-over in the fifth tranche.

It may be recalled that CIL has successfully carried out four tranches of linkage auctions – the fifth tranche was initiated in 2019 wherein sales were concluded for sponge iron and the steel sub-sectors.

But due to Covid outbreak, auctions for the remaining sub-sectors viz. cement, captive plants and other were deferred indefinitely.

Subsidiary-wise coal offers

The company has put up 3.22 million tonnes (mn t) of coal for sales from its various subsidiaries for an 11-days sales process starting from 10 Sep’21.

South Eastern Coalfields Ltd (SECL) has offered the highest volume of 1.584 mn t for auctions followed by Western Coalfields (WCL) and Northern Coalfields (NCL). No coal has been offered from Bharat Coking Coal Ltd (BCCL).

Coal volume in the latest round of auction decreased 31% from 4.66 mn t offered in the fourth tranche. Besides, there has been a gradual decline in high calorific value coal put-up for sale.

Coal having higher calorific value (CV) value in the range G3-G9 comprise 42% of the total coal volume in the auction, whereas bulk volume falls under G10-G13 grades which is having low CV. Notably, G11 grade alone accounts for almost one-third of the offered volume.

The previous tranche of sales received overwhelming response with the highest ever allocation recorded since the linkage auctions were introduced. Similar response is expected in the upcoming sales from domestic players, especially at a time when imported prices have reached unprecedented levels.