Singareni Collieries Company Ltd (SCCL), the domestic coal miner operating in the state of Telangana, has received subdued demand for coal sales concluded via the monthly auction.
Offered volume in the auction held on 20 Jan’22 was 907,000 tonnes (t), of which 347,612 t were booked at an average price of INR 4,341/t, garnering a premium of 22% over the assessed notified price for the grades on offer.
The premium was comparatively lower in comparison to the auction sales conducted by various subsidiaries of Coal India Ltd (CIL), which have witnessed aggressive bidding from the buyers.
Notably, CIL’s mining arm based out of Jharkhand, Bharat Coking Coal Ltd (BCCL), had fetched gains of 98% over the notified price for spot auction held in Jan’22, primarily in view of the supply concerns.
Disparity in bids over coal sizing
Similar to CIL, SCCL also practices the same price channels for conducting sales via auction, i.e., reserve (floor) price is fixed by adding an upper cap in terms of percentage on the notified coal price.
However, a comparative analysis of the sales concluded by SCCL indicates that bids were particularly high for the RND coal against CRR coal.
Auction price for coal offered on road-mode of dispatch
Prices in INR/t exclusive of taxes
In case of G7, RND coal was booked at price of INR 6,906/t, garnering bids in excess of INR 1,306/t over the reserve price, whereas the CRR was sold at the base price. Similar trend was also seen for G10 and G11 grades.
It is important to note that coal grades are classified into three categories based on sizing, namely- run of mines (ROM), round (RND) and crushed ROM (CRR).
ROM comprises of all sizes which come out of mine without crushing/screening. The fraction of ROM coal retained on a screen when subjected to screening is called Round (RND) coal. On the other hand, coal having top size limited to a maximum range of 200-250 mm is called Crushed ROM (CRR).
Incidentally, an additional amount is charged for supply of RND and CRR coal over the ROM coal.
SCCL’s performance
SCCL is regarded as the second largest coal producing company after CIL, but it accounts for a mere 10% of India’s overall coal production.
For the ongoing fiscal FY’22 (Apr’21-Mar’22), the company has produced 51.48 mn t coal as on 26 Jan’22, registering a substantial increase of 37% y-o-y. Production target for this fiscal is 68 mn t.
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