Continuing the series of linkage auction envisaged under the fifth tranche meant for the non-power sector, Coal India Ltd (CIL) has decided to initiate coal sales for the ‘other’ sub-sector. The ‘other’ means specified end-user plants that belong to the sectors other than cement, sponge iron, fertilizers and captive power plants.
This will be a 10 day-long auction process starting from 7 Jan’22. The current round would feature sale of 2.89 million tonnes (mn t) of coal offered from various CIL subsidiaries.
It may be recalled that the ongoing tranche was initiated in 2019. However, after conclusion of sales for the sponge iron and steel sectors, the auction for the remaining sectors was deferred due to covid outbreak.
Upon resumption, the auction process for the captive power facilities and cement plants were concluded this year.
Key-takeaways
Sales via the linkage route warrants long-term fuel supply for a minimum of five years, offering coal at a subsidised price compared to the regular auctions conducted by CIL.
However, the company has put the lowest quantity for sale to the ‘other’ sub-sector in the current tranche of auction.
Of the total offered volume, Northern Coalfields Ltd’s (NCL’s) allocation is the highest at 1.3 mn t, followed by Western Coalfields Ltd (WCL) and Mahanadi Coalfields Ltd (MCL).
In fact, Bharat Coking Coal Ltd (BCCL) and Eastern Coalfields Ltd (ECL), the two subsidiaries that reported the lowest coal inventories at the end of Dec’21, have not offered any coal in these auctions.
Grades on offer for sale predominately includes non-coking coal in the lower calorific value band. Notably, apart from 170,000 t of G6 and G9 coal from WCL, rest of the offered volume this term fall in the range of G10-G14.
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