CIL earns 39% premium on 6.38 mt auctioned coal

Coal India has managed an average premium of 39% on 6.38 million tonnes of coal it auctioned to sponge iron customers, helping the state-run coal monopoly get additional annual revenue of Rs 1,248 crore for five years, a company executive said.

If these supply contracts were awarded on nomination basis, it would have earned about Rs 350 crore less, the executive said. That is because the average price realised at the auction was Rs 1,955.8 per tonne, while the average notified price of the coal on offer was Rs 1,407.6 per tonne.

The price is 59% higher than what is charged to power sector consumers.

Coal India sold 88% of the 7.27 million tonnes in contracts for a minimum period of five years in the auction that spanned 18 days from June 26, the executive said. Mahanadi Coalfields, one of the largest subsidiaries of the company, got a 50.6% premium over the notified price for 2 million tonnes of coal that was offered and fully booked. This will help it raise sales by Rs 311.31 crore a year.

South Eastern Coalfields, which offered 3 million tonnes of a higher grade coal, got a premium of 44.8% over notified price, which will help it add Rs 719.26 crore a year to its revenue. Eastern Coalfields managed a premium of 31.3% by offering half a lakh tonne of coal that would fetch the company around Rs 16 crore annually. It managed an average price of Rs 4,145 per tonne at the auction.