Coal news and updates

Government asks MSTC to create e-auction platform for coal supply to non-power sectors

The government has asked public sector entity MSTC to create an e­auction platform for coal supply to the non­power sectors. To begin with, the platform will conduct eauctions for 24 million tonne of coal for companies that do not have any supply contract with Coal India. "We are readying the platform that would be used to auction fuel supplies to nonpower sector," said SK Tripathi, chairman of MSTC.
 

Eventually, the government will also auction coal to the power sector, its main client, but this is unlikely to happen before April this year, Tripathi said. Last week, the government declared that long­term coal supply contracts for sectors like steel, cement, and aluminium will be granted only through e­auctions. At present, existing coal supply contracts will continue but they will be auctioned once they expire, Tripathi said

"The auction route will be followed for all future contracts, once the existing fuel supply agreements lapse. Hence, to start with, it would be about 24 million tonne, which would gradually increase as and when supply agreements lapse," said Tripathi. According to reports, the government has drawn out the schedule for the e­auction exercise, which is likely to start in the next 7­10 days.

The government is aiming to hold the first set of auctions by April end and has asked MSTC to prepare the portal for it. Coal India reported 9.8% growth in coal production till January this fiscal. With all power companies having enough stock of coal, Coal India would like to ensure that it sells all the coal it produces or it may be forced to revise its production targets downwards.

Source: Economic Times