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Coal India to offer 130 mln tn of coal in e-auction in 2021-22

Informist, Thursday, Apr 8, 2021

 

By Avishek Rakshit

 

KOLKATA – Coal India Ltd has decided to initially allot 130 mln tn of coal under the e-auction platform for the current financial year as against sales of 124 mln tn in the financial year ended March 31, 2021.

 

A senior company official in the know told Informist, “In case of increased appetite in auction sales, more quantities could be offered in consultation with the coal ministry”.

 

If the demand pans out favourably this financial year, e-auction sales will be higher than 2020-21, the official said.

 

Coal India initially allots coal under the auction platform usually at a 20% premium over the notified coal price and then final sales are derived based on participation in the auctions and the final quantity booked by the bidders.

 

For the nine months ended Dec 31, 2020, Coal India’s average price realisation from the auctions stood at 1,487.43 rupees a tn netting an average of around 16% premium over notified prices. However, in the same period of the 2019-20 financial year, Coal India had netted a 40% premium.

 

“In the January e-auctions, we were able to achieve a 24% increase over the notified coal price and we think that demand will bounce back soon given international dynamics in the industry,” a second company official said.

 

The official reasoned that aggressive Chinese buying of Indonesian coal, hitherto India’s favourite coal import destination, has led to higher global coal prices as well as created some scarcity in India.

 

“We definitely stand to gain from the global imbalance since Indian coal has now become competitive in terms of effective pricing and global scarcity will lead to higher import substitution,” the company executive said.

 

Although the final data on auction sales is yet to be collated, industry sources estimated that the premium in e–auction sales for 2020-21 (Apr-Mar) would be in the range of 16-18%.

 

Coal India has identified specific mines under Eastern Coalfields Ltd, Bharat Coking Coal Ltd, Central Coalfields Ltd and South Eastern Coalfields Ltd zones, from where buyer response has been positive in e-auction sales and plans are afoot to increase the output from those mines so that more coal can be offered under the e-auction platform.

 

Currently, the world’s largest coal miner is laden with an all-time high stock of around 100 mln tn owing to increased production and tepid demand.

 

At 1158 IST, shares of Coal India were trading up 1.5% at 133.20 rupees on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Michael Correya

 

 

Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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