Coal news and updates

Sharp decline in sale of coal via e-auction in H1

October 30: The government’s directive to Coal India Ltd (CIL) – to restrict its coal offerings on the e-auction platform in order to supply more to the power sector – led to a sharp decline in the offered and allotted quantities of the fuel through various online platforms during the first half of 2014-15 as compared to the corresponding period of 2013-14, according to provisional data available with ICMW.

During the first half (April-September) of 2014-15, the total allotment through spot e-auction stood at 17.99 million tons (mt) whereas the offered quantity stood at 18.902 mt. During the corresponding period of 2013, the offered and allotted quantities stood at 28.24 mt and 24.09 mt, respectively.

The notified price of the allotted quantity in the first six months of 2014-15 (April-Sept) stood at Rs 2,800.46 crore against which the bid price was Rs 4,619.65 crore. The notified price of the allocated quantity in the first six months of 2013-14 stood at Rs 3,956.09 crore whereas the bid price was Rs 5,424.29 crore.

The offered quantity under spot e-auction fell 8% to 0.782 mt in September from 0.85 mt in August and by 84.14% from 4.93 mt offered in September 2013, the data revealed.

The allotted quantity, on the other hand, fell sharply by 6.02% to 0.78 mt in September from 0.83 mt in August and by 82.43% from 4.44 mt in September 2013.

The government, at the beginning of June, had directed CIL to restrict its offerings through 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 September moved up to 96.75%. In August, it stood at 86.1% compared to 74.02% in July while in June it had gone up to 73.54% against 57.98% in May as a large number of buyers rushed to acquire the small quantities offered through the online platform.

In September, the notified price of the total allocated quantity of coal was Rs 162.55 crore while the realised value was Rs 319.81 crore.

However, during August, the notified price of the total allocated quantity of coal was Rs 154.7 crore while the realised value was Rs 287.89 crore while in July, the notified price of the total allocated quantity was Rs 300.86 crore and the realised value was Rs 523.55 crore.

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