Coal India Limited (CIL) will close the current fiscal with 120 million tonnes of coal offered under the e-auction mode – the highest ever amount auctioned by the company.
The miner registered an annual growth of 76.2 per cent during April-December 2020 in the sale of coal under the auction mode. CIL booked 81.4 million tonnes of coal under the five auctions it held till December. This was an additional volume expansion of 35.2 million tonnes over the same period last year.
Apart from long-term fuel supply agreements that CIL has with power plants and several non-power companies, it also periodically holds e-auctions of coal for several industries.
The Coronavirus-induced lockdown, followed by sluggish growth in industrial activity and demand from the electricity sector hit coal demand and thereby the revenue stream of CIL from existing supply contracts. The company increased supply of coal under auction mode to meet the demands of industries which do not have long-term fuel supply agreements with CIL.
In October, CIL launched a special category of e-auction of coal for those companies and traders which import coal to meet their requirements. Under this special auction 7.3 million tonnes of coal was booked in the three auction rounds held.
These auctions are in line with the Centre's efforts to bring down coal import to zero.
A senior CIL executive said, as the auction sales have surpassed previous estimates, the company is confident of allocating 120 million tonnes of coal by the end of the current fiscal
“We have identified specific mines in Eastern Coalfields, Bharat Coking Coal, Central Coalfields and South-East Coalfields (subsidiaries of CIL) from where the response has been positive in e-auction and there is potential for further increase” said the executive.
Increased volumes of coal under e-auction have also bolstered the sales revenue of CIL, especially in view of the narrowed margins in add-ons during Covid-19 pandemic period, he said.
Apart from increased volume bookings, premium over notified price has also risen for CIL. The company received an average premium of 15 per cent during the auction rounds held between April-December 2020.
Among the subsidiaries, Eastern Coalfields clocked the highest 40 per cent increase over the notified prices with Central Coalfields and Bharat Coking Coal registering 23 per cent and 22 per cent respectively, said a statement by the company.
CIL said the non-power sector consumers booked 19.8 million tonnes under an exclusive auction window, during the first nine months of the ongoing fiscal posting more than a three-fold increase last year. The premium earned in these rounds over the notified price was 25 per cent.
December 2020 saw a significant increase in bookings from the power sector under special forward auction at 5.1 MTs compared to 0.5 MTs the same month year ago fetching a premium of 12 per cent, CIL said.