Coal news and updates

CIL may ask MoC to reconsider e-auction directive

August 13: Coal India Ltd (CIL) is planning to urge the Ministry of Coal to reconsider the latter’s directive to reduce the quantity of coal to be sold through the e-auction route to 25 million tons (mt) in 2014-15, said a director at CIL.

The board, at its meeting on August 12, felt that reduction in the e-auction quantity will severely inconvenience small consumers who do not have linkages and rely on e-auction to meet their demand, the director said,

“In view of above, the board has decided to tell the government not to force it to go ahead with the directive,” the director added.

The reduction in the e-auction quantity will negatively impact the company’s bottomline as its average realisation is about 30-40% higher by selling coal through this system, the director added.

Incidentally, the Ministry of Coal, in a directive in June had asked CIL to restrict the auction quantity to 25 mt.

Incidentally, CIL had allotted about 58 mt of coal through the spot e-auction route in 2013-14 and had directly added about Rs 3,500 crore to its total profit.

If the e-auction quantity is reduced to 25 mt, the company may find it difficult to protect its margins, an analyst said.