New Delhi: India plans to create a new window for providing coal linkages under the Non-Regulated Sector Linkage Auction Policy to enhance industrial use and exports without end-use restrictions. The Coal ministry has proposed a new ‘CoalSETU’ auction window allowing for long-term coal allocation for any industrial use or export without specified end-use restrictions wherein domestic buyers, not traders, could participate.
This Coal linkage for Seamless, Efficient & Transparent Utilisation (CoalSETU) would be for own consumption, export, or other purposes (excluding resale in the country).
As per the provisions of the SHAKTI Policy and the NRS Linkage Auction Policy, supply of coal is for specified end uses only where Coal India Ltd (CIL) and Singareni Collieries Company Ltd (SCCL) sell either through a linkage or an e-auction.
While supplies for the power and urea producers are price regulated under the SHAKTI policy, the NRS buyers such as fertiliser (other than urea), cement, steel, sponge iron, aluminium etc buy through the NRS auction where separate quantities are earmarked for the sub-sectors and they compete within themselves. Besides these linkages, 10-20 percent of the output is supplied through e-auctions under the provisions of New Coal Distribution Policy (NCDP), 2007 where there is no end use restriction. Captive coal mine owners are allowed to sell up to 50 percent of their output in the open market following the 2021 amendment in the Minerals (Development and Regulation) Act.
However, looking at the current and future market dynamics, accelerated utilization of existing reserves and reduction in import dependence, the ministry decided to extend the NRS linkages to consumers without any end use restrictions.
In line with the opening of the coal sector for commercial mining which allowed allocation of blocks without any end-use restrictions, it has proposed that the policy for NRS auction be expanded for allocation of linkages on auction basis on long-term for any industrial use and export by adding another window and sub-sector. The present auction of coal linkages for the specified end-user sub-sectors in NRS shall continue.
Auctions will be conducted by CIL/SCCL with a transparent methodology where the base price would be set at a reserve price not below the notified price. Coal linkage winners can export up to 50 percent of their linkage quantity, and a 50 percent rebate would be given on the final bid premium for exported coal.
The move will ensure a diverse range of NRS consumers have access to coal resources.