Coal news and updates

Coal India auctioned 1.04 million tonnes per annum of linkages to sponge iron companies for ₹102.96 crore. This supply deal will be for five years.

On Monday, coal linkage or fuel supply agreements worth 1.13 million tonnes were on offer. The auction was conducted in three slots. In the first slot, 480,000 tonne per annum of coal was on offer from the Belpahar OCP via road connectivity. For this, companies paid a premium of ₹25 per tonne over the reserve price of ₹860/tonne.

In the other two slots of the day — 470,000 tonne per annum from Junadih GPCK in Chhattisgarh and 180,000 tonne per annum from KDH-I in Jharkhand — bids did not go above the reserve price. The quantity bid for was also lower than that on offer.

Our Kolkata Bureau reports

Reacting to the low interest from the sponge iron sector, CIL officials said this was due to the downturn in the steel industry and the Chinese competition.

Over the last three days linkages for 2.92 million tonnes were offered to the sector. But contracts for only 1.64 million tonnes were sold. On Day 1 of the auction, last Friday, only 42 per cent of the offerings found buyers. The situation improved on Monday as 92 per cent of the 1.13 mt offerings got sold.

The current round of auction will continue till June 16, after which CIL will offer linkages to users from cement, metals, etc. A total of 23.75 mt of linkages are to be put on the block.

Source: thehindubusinessline.