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Centre lets CIL sell more coal through e-auctions

In a boost to Coal India Ltd, the government has increased the quantity of coal that the state-owned miner can sell through e-auction.

Coal India Ltd, which had last year sold 7 per cent of the total sales through e-auction. The government had in a letter dated April 1 written to Coal India stating that the modalities of e-auction of coal beyond March 31, 2015 was considered by the ministry.

“With the approval of the competent authority, it has been decided to revert to the old system (on e-auction)...,” the letter said. Under the old system, Coal India was allowed to sell up to 10 per cent of coal through e-auction. According to the source, Coal India may take a decision of allowing the e-auction of coal up to 10 per cent. Under e-auction, coal is sold at spot market price. Last year, Coal and Power Minister Piyush Goyal had asked CIL to reduce the quantity offered in e-auctions so that power utilities can get more supplies of the fuel. The company was directed to limit e-auctioning of coal to 25 million tonnes in the last year from 57 MT.

However, according to the sources, in the last fiscal 49 million tonnes of coal was sold through e-auction as it was asked by the ministry to e-auction the surplus coal from those mines that have been facing evacuation constraints. “Coal which is found surplus at the said mines (having serious evacuation constraints) after meeting the requirement ...shall be e-auctioned,” the Coal Ministry had earlier said in a letter to CIL. There has been a large accretion of coal during this peak production season at mines which have serious evacuation constraints, the ministry had said. At the same time, coal needs to be made available to the FSA (Fuel Supply Agreement) holders on priority, it added.

Coal India scrip soars 6%, adds Rs 13K cr to MCap

Shares of Coal India Ltd surged over 6 per cent on Wednesday, adding more than Rs 13,000 crore to its market valuation, amid reports that the government has lifted the cap on the company’s e-auction sales. Following the buzz, the stock soared 5.73 per cent to settle at Rs 380 on the BSE. During the day, it jumped 6.37 per cent to Rs 382.30. At the NSE, the scrip rallied 6.23 per cent to end at Rs 382. The stock was the biggest gainer on the Sensex and Nifty. Following the sharp rally in the stock, the company’s market value jumped Rs 13,011.85 crore to Rs 2,40,021.85 crore.

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