Coal news and updates

Govt directive causes sharp fall in allotment via June e-auction

July 31: The government’s directive to Coal India Ltd (CIL) - to restrict its coal offering under e-auction in order to supply more of the commodity to the power sector consumers - led to a sharp decline in the offered and allotted quantities of coal through various online platforms in the month of June, according to provisional data available with ICMW.

The offered quantity under spot e-auction fell 22.74% to 4.18 million tons (mt) in June from 5.41 mt in May and by 21.28% from 5.31 mt offered in June 2013, the data revealed.

The allotted quantity, on the other hand, fell 23.74% to 3.92 mt from 5.14 mt in May and by 13.08% to 4.51 mt in June 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 June surged to 73.54% as compared to 57.98% in May as a large number of buyers rushed to buy the small quantities offered through the e-auction route.

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 quarter (April-June) of 2014, the total allotment of coal through spot e-auction stood at 14.65 mt whereas the offered quantity stood at 15.44 mt. During the corresponding period of 2013, the offered and allotted quantities stood at 13.12 mt and 11.28 mt respectively.

The notified price of the allotted quantity in the first quarter of 2014-15 (April-March) stood at Rs 2,161.92 crore against which the bid price was Rs 3,467.06 crore. The notified price of the allocated quantity in the first quarter of 2013-14 stood at Rs 1,771.52 crore whereas the bid price was Rs 2,567.03 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 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 earning 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 2013-14 and 2012-13:

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