Coal news and updates

Bid prices may correct in future e-auctions

February 27: One source closely connected with the e-auction process told ICMW that the mines have already reached their peak levels and thus auction prices should henceforth soften.

“Power generation cannot happen at such high bids. There will be a kind of a correction in the bidding game,” said the source on condition of anonymity.

“Even though Coal India says its prices are cheaper, companies are paying these rates through their nose since they have to run their capacities. But if such commodity price levels sustain then there is a problem because, for instance, in the aluminium industry 33% of the cost is power. However, the bids are almost two-times the price of linkage coal,” said the source, adding that such high bid prices are unrealistic and cannot sustain.

Another source, agreeing, said, the cost of power being very high in certain states, many manufacturing units have already shut down, especially in Maharashtra. “So, the industry has to bring down the cost of power to make production viable,” said the source, adding that India’s coal is of very bad quality and we need to convert it into low cost power and use the same for growing our manufacturing and services sector.