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Coal India Ltd to e-auction surplus coal from mines with evacuation problems

State-owned Coal India LtdBSE -0.11 % has been asked to e-auction the surplus coal from those mines that have been facing evacuation constraints.

"Coal which is found surplus at the said mines (having serious evacuation constraints) after meeting the requirement ...shall be e-auctioned," the Coal Ministry has said in a letter to CIL.

Under e-auction, coal is sold at spot market price. There has been a large accretion of coal during this peak production season at mines which have serious evacuation constraints, said the ministry.

At the same time, coal needs to be made available to the FSA (Fuel Supply Agreement) holders on priority, it added.

The ministry further said that at the beginning of each month -- December-March of the ongoing fiscal, CILBSE -0.11 % will notify on its portal and the website of its subsidiaries, the quantity of coal likely to be surplus till month-end, at mines facing evacuation constraints.

"Requests will be invited simultaneously on the websites itself from the consumers of the following categories (power plants commissioned before 1.4.2009 having FSA's with the coal companies, power plants which have got commissioned after 1.4.2009 and which have FSA's) regarding the quantities of coal they can evacuate on their own till month end from the said mines," the ministry said.

The arrangement will be in place till March next year, it added.

Coal and Power Minister Piyush Goyal had earlier asked CIL to raise production from existing mines and reduce the quantity offered in e-auctions so that utilities can get more supplies of the fuel.

The company was directed to limit e-auctioning of coal to 25 million tonnes this year from 57 MT.

CIL, which accounts for over 80 per cent of the domestic coal production, mined 462 MT coal last fiscal, missing its target of 482 MT.

Source: Economic Times