Coal news and updates

CIL aims to sell 46 mt via e-auction in 2014-15

February 19: Encouraged with the increase in production and improvement in coal stocks at power plants, Coal India Ltd (CIL) is aiming to end financial year 2014-15 with total sales of 45-46 million tons (mt) of coal through the e-auction route.

A senior official from the company told ICMW that with the increase in production and slightly lower demand from power companies during the past two months starting December, it has increased the quantum of offering through e-auction.

The company’s e-auction sales during the first nine months of 2014-15 (April-December) stood at 27.86 mt, down from 40.47 mt allotted during the corresponding period of 2013-14, according to data available with ICMW.

This had happened because the offerings fell to as low as less than 0.5 mt per month between May and October 2014.

However, with the improvement in production and consequent improvement in coal stocks at power plants, the company offered a total of 7.23 mt coal in December of which 6.15 mt got allotted.

In December 2013, the company had offered to sell only 6.92 mt coal through e-auction and had managed to sell or allot 5.64 mt.

“The supplies (to power plants) improved and now the situation is such that many power plants do not want coal. May be in next two-three months, they will increase their demand once summer sets in. But right now it is good that they have built up their stocks,” the official said.

Asked if the company is planning to increase the e-auction quantity in the coming months, considering the fact that there is ample stock of around 18.5 million tons at power plants from a low of about 7.1 million tons in July-August last year, the official replied in the affirmative.

“As of today, we have already increased the auction quantity. In between, the offered quantity had declined to below 1 million tons, but now it has improved,” the official said.

“We had committed to sell 46-47 million tons of coal through e-auction in 2014-15 and the final figure would be somewhere in the range of that only,” the official added.

Asked whether the offering of 46-47 million tons will not amount to disobeying government norm, which directed the company to restrict its e-auction sales to 25 million tons during the year, the official said, “In any case, there was no directive as such from the ministry, but a suggestion to reduce the offering to 25 million tons in 2014-15. The suggestion had come at that time when there was shortage of coal at power plants due to excess generation and lower than planned imports.”

“So, currently, we expect total offering and allotment through e-auction in 2014-15 to be 45-46 million tons. If we are able to reach that level of e-auction while meeting the demand from the power sector, it will definitely be good for the company,” the official added.