APMDC Suliyari coal upcoming auction 1,50,000 MT for MP MSME on 2nd Dec 2024 @ SBP INR 2516/- per MT
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New UserDemonetisation shuts out traders, small firms from coal eauction
22 Nov 2016
Demonetisation of Rs 500 and Rs 1,000 notes has hit Coal India’s eauction that
was meant to offer coal to traders and nonpower producers like sponge iron firms, brick
kilns and small consumers who do not have a supply commitment from CIL.
Drying up of payments from their customers have resulted in depleting cash in the hand of
these coal consumers, which in turn has resulted in them not being able to make upfront
advance payments for participating in eauctions. Lack of cash in the system has been a major problem for coal consumers who use
casual labours to load and unload coal on trucks.
Coal India had extended the deadline for payment of advances for participating in eauctions from November 11 to November 18 in view of
demonetisation.
There are a large number of small traders who regularly buy coal through eauction. They primarily transact in cash with their consumers.
This section of the bidders have been finding it difficult to participate in the auctions.
“Traders carry the coal on trucks which is loaded and unloaded by manual labourers. Payments to trucks and labourers are made in cash
who do not accept cheques and are not comfortable with fund transfers,” said a coal trader. “This has led to stoppage of coal transport,
prompting them not to participate in auctions since they cannot lift the coal,” the person said.
A senior official from a coal consumers association said a large number of medium and small sponge iron manufacturers regularly
participating in auctions deal in cash with their customers. “A major portion of this segment are not in a position to pay the advances and is
facing the possibility of not being able to participate in the eauctions.”
Apart from paying an advance to Coal India for participating in the auction, successful bidders need to pay upfront before lifting the coal.
Coal India does not generally offer credits to small consumers and traders. This category of consumers, large in number, are now facing
hardship in participating in auctions.
Source:ET