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| CIL may reduce floor price of e-auction coal |
| Jayajit Dash / Bhubaneswar Sep 11, 2009, 00:51 IST |
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After receiving a lukewarm response to the forward e-auction started in two of its subsidiaries, Coal India Limited (CIL) is mulling to reduce the floor price of coal being sold through this route.
The forward e-auction process, which started in Western Coalfields Limited (WCL) and Eastern Coalfields Limited (ECL) — the two subsidiaries of CIL last month, has drawn a lacklustre response as the floor price of coal offered through this route was twice the notified price.
The coal consumers cannot buy coal at such high prices through the forward e-auction route and this has prompted CIL to think of a downward revision in the floor price, an industry source told Business Standard.
Two rounds of bidding have been completed so far for the forward e-auction launched in August this year.
In the first round, WCL had offered about 500,000 tonnes of coal through the forward e-auction route out of which sale of only 1,200 tonnes of coal materialized. On the other hand, the coal offered by ECL in the second round drew a blank from the consumers.
Earlier, coal consumers across the country had objected to CIL’s decision to fix the floor price of coal to be sold on the forward e-auction platform at two times higher than the notified price.
The coal consumers alleged that CIL is keen on making greater profit through sale of forward e-auction coal without caring for the interests of the consumers.
On its part, CIL has clarified that high grade coal containing low ash content from the UG mines was to be sold on the forward e-auction platform. The floor price of this coal has to be higher as the cost of coal production from UG mines was higher than that of open cast projects.
Ten per cent of the spot e-auction coal was to be sold through the forward e-auction route.
In 2009-10, 45 million tonnes of coal was to be sold through the e-auction mode and 10 per cent of this coal was proposed to be sold through forward e-auction.
The two platforms for forward e-auction are mjunction.com and MSTC Limited.
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