Millennium Post

E-auction of coal linkages to non-regulated consumers

A total of 23.75 mt of coal has been put on the block for the year 2016-17 for auctioning of linkages to consumers belonging to non-regulated sectors. 

The move will benefit consumers of this sector not having linkages or whose Fuel Supply Agreements are expiring or got expired. Other benefits for consumers of this segment include the option of choosing specific grade of coal, preferred source of supply, mode of transport etc. 

Non-regulated sector consumers who account for approximately 25 per cent of Coal India’s entire off-take include captive power plants, cement plants, sponge-iron plants, fertiliser, chemical and many other industrial units. 

In a first, Coal India had offered 3.78 mt of coal exclusively used for Sponge Iron manufacturing, a subsector of non-regulated consumers, of which 2.05 mt of coal was booked during the six day period the auction was held from 10 to 16 June 2016. The contract period is for 5 years which can be extended to 10 years with the mutual agreement of both parties. 

The Sponge Iron plants spread across the country currently draw around 8 mt of coal annually from Coal India. In the second tranche linkage auctions for Cement Sector shall under the electronic hammer with a volume of 2.15 mt.  

Auctioning of linkages to other sectors is also on the anvil. Non-regulated consumers would now be able to book 100 per cent of their normative requirement through the bidding process instead of the earlier practice of around 75 per cent of their normative requirement. 

The bidders, taking into consideration their techno-economic requirements, would also have the option of selecting the grade of coal, secure their coal requirement from the nearest mine of their choice, as well as the mode of transport in a bid to save their logistics cost. 
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