Coal news and updates

Govt directive causes sharp drop in July e-auction allotment

August 27: The government’s directive to Coal India Ltd (CIL) - to restrict its coal offering on the e-auction platform in order to supply more of the commodity to the power sector - led to a sharp decline in the offered and allotted quantities of coal through various online platforms in the month of July, according to provisional data available with ICMW.

The offered quantity under spot e-auction fell 57.89% to 1.76 million tons (mt) in July from 4.18 mt in June and by 61.32% from 4.55 mt offered in July 2013, the data revealed.

The allotted quantity, on the other hand, fell sharply by 56.89% to 1.69 mt in July from 3.92 mt in June and by 57.86% from 4.01 mt in July 2013.

The government, at the beginning of June, had directed CIL to restrict its offering under the e-auction platform to 25 million tons in a year after it was found that a number of power plants in the country were facing lower coal stock positions.

Many cement, power and sponge iron companies and brick kiln-makers in India depend on coal offered by CIL through e-auction as they do not have linkages to procure domestic coal.

Consequent to a decline in the offered quantity, the premium earned in the e-auction over the notified price in July increased further to 74.02% while in June, it had gone up to 73.54% as compared to 57.98% in May as a large number of buyers rushed to acquire the small quantities offered through the e-auction route.

In July, the notified price of the total allocated quantity of coal was Rs 300.86 crore while the realised value was Rs 523.55 crore.

On the other hand, the notified price of the total allocated quantity of coal in June stood at Rs 585.13 crore while the realised value was Rs 1,015.46 crore.

In May, CIL had earned a premium of 57.98% as the bid price of the allocated quantity of 5.14 mt stood at Rs 1,194.82 crore against the notified price of Rs 756.2 crore.

During the first four months (April-July) of 2014, the total allotment of coal through spot e-auction stood at 16.35 mt whereas the offered quantity stood at 17.19 mt. During the corresponding period of 2013, the offered and allotted quantities stood at 17.67 mt and 15.28 mt respectively.

The notified price of the allotted quantity in the first four months of 2014-15 (April-July) stood at Rs 2,462.77 crore against which the bid price was Rs 3,990.61 crore. The notified price of the allocated quantity in the first four months of 2013-14 stood at Rs 2,447.06 crore whereas the bid price was Rs 3,439.80 crore.

The total allotment of coal through spot e-auction during 2013-14 stood at 58.12 mt while the offered quantity was 68.86 mt. The offered and allotted quantities in 2012-13 stood at 52.43 mt and 44.26 mt respectively.

CIL earns significant additional revenues by selling coal through spot e-auction and its earnings are likely to get severely impacted in 2014-15 due to the restriction on selling coal through this route, industry sources said.

In fact, CIL had earned additional revenues of about Rs 3,500 crore by selling coal through e-auction in 2013-14. During 2012-13, the company’s additional earnings by selling coal through spot e-auction was slightly higher at Rs 3,711.97 crore

The following table contains the quantity of coal (provisional data) allotted by CIL via the spot e-auction route during 2014-15, 2013-14 and 2012-13:

# Figures may not tally due to revision in data made by CIL for prior period.