Diversion of e-auction coal to power cos will affect others: Coal Ministry

The govt will provide coal under e-auction quota to power producers to meet the fuel crisis

Amid the power sector facing fuel shortage, the Coal Ministry has opined that diversion of a portion of e-auction coal to power producers will affect the fuel supply to other sectors, including steel and cement.

This follows Coal Minister Sriprakash Jaiswal stating that the government will divert coal under e-auction quota to power producers to meet the fuel crisis.

"Five million tonnes per annum of approximately 40-45 million tonnes of e-auction was pertaining to the mines that have rail connectivity.

"This portion could be gradually diverted for use by the power sector. However, Secretary, Coal is of the opinion that this would affect the coal supplies to other sectors," an official document on issues relating to coal for the power sector said.

Under e-auction, coal is sold at spot market price. Around 10% of the total coal produced by state-owned Coal India (CIL) is sold through e-auction.

The matter had also come up for deliberations at a high-level meeting held recently. Coal Secretary SK Srivastava and Power Secretary Uma Shankar were among those who attended the meeting.

"Keeping in view the shortfall in meeting the demand of the power sector and the obligation of CIL to honour Letter of Assurances (LoAs), the issue of reducing the quantity of coal sold by CIL through e-auction was discussed," the official document said.

Earlier, CIL had offered a certain portion of its coal meant for e-auction to power companies to ease coal shortage that caused frequent disruptions in electricity generation.

The Power Ministry had also, earlier, requested the Coal Ministry to provide coal supplies for power projects before going ahead with e-auction.