Govt clears CoalSETU window to auction coal linkages for all uses, exports

Firms holding long-term rights (linkages) to purchase coal from the government auctions can now export up to 50 per cent of their allotted quantity, as the Centre on Friday approved a major change in coal allocation by allowing auction of coal linkages for any industrial use and exports under a newly created CoalSETU window.

 

This is the first time coal linkages are being opened without end use restrictions. It is aimed at expanding access to domestic coal, improving resource utilisation and reducing import dependence.

 

Under the new policy, any domestic coal consumer (other than traders) will be eligible to participate in long term linkage auctions.

 

The only exclusion is coking coal, which will not be offered under this window.

 

Existing NRS sub-sectors including cement, steel, sponge iron, aluminium and others will continue under the current auction structure but may also bid in the new window.

 

Coal obtained under the CoalSETU window can be used for own consumption, export or coal washing, but resale within India will not be permitted.

 

The policy also allows companies to flexibly utilise coal for captive use. Washery operators will be eligible for linkages, which, the government said, will help increase the supply of washed coal domestically and cut imports. Washed coal obtained under this mechanism may also be exported.

 

The NRS linkage policy of 2016 restricted coal allocation to specified end users. The government said evolving market conditions, the need to accelerate use of domestic reserves and the broader coal market liberalisation since commercial mining began necessitated removal of end use constraints for linkages as well.