Coal news and updates

Coal India’s (CIL’s) first tranche of linkage auction for the non regulated sponge iron sector posted a booking of 2.05 million tonne against the offer of 3.78 million tonne. The booking has been done for a contract period of 5 years, which can be extended to 10 years with mutual agreement between supplier and the taker.

A coal ministry official on the condition of anonymity said the first tranche of auction was a low key affair since booking was much lower than that was offered. Sponge iron plants across at present draw around 8 mt per annum from CIL. While the offer was less than 50% than that of the general demand, booking was even lower.  Besides CIL could get only 1% premium on the floor price of coal per tonne.

Although the average auction price per tonne is yet to be worked out coal price across grades for non regulated sector is 120% of the notified price of coal for the regulated sector.  Different grades of coal have different prices and the linkage quantity was more or less booked at the floor price per tonne. However, average price realization could be between Rs 1,300 and Rs 1,400 per tonne, a CIL official said.

source:Financial Express