The government proposes to allow Coal India Ltd to export surplus coal for the first time since its inception while clubbing all spot auctions held by the state-owned miner for various consumers for trading on one exchange.
The state-run miner is likely to set up a special e-auction window for export of coal which cannot be sold in India. The coal ministry has also proposed a single auction trading platform for all coal consumers of Coal India, sources in know of the development said.
A senior government official said coal prices to power and non-power Coal India consumers who hold long term linkages will remain unchanged.
Presently, Coal India sells 20-25% of its coal through several exclusive auctions to power consumers, non-power consumers and coal importers. The proposal to allow Coal India hold single e-auction would require change in present policy and an approval from the Union Cabinet, they said.
“After meeting requirement of linkages of power and non-power consumers, Coal India should be allowed to sell coal on a transparent basis. Coal trading platform as a single e-auction window would enable removal of market distortions leading to one nation, one price for one grade,” the official said.
Another government official said next year CIL targets production of 740 million tonnes of coal against about 640 million tonnes now, ensuring adequate coal availability. CIL registered 77% growth in e-auction sales in April-November of the ongoing fiscal, booking 68.3 million tonnes.
ET had on January 12 reported the government proposes to start a coal exchange later this year to trade coal mined from private commercial mines along with CIL’s spot auctions. ET was the first to report on June 8, 2020 that India has decided to set up a coal trading platform as a giant leap towards completely throwing open the sector to market forces.
The government has auctioned 19 coal blocks in the first tranche of commercial coal auctions. Another 75 mines with reserves of over 38,000 million tonnes are proposed to be offered in the current tranche of the auctions. The coal blocks do not have any end use restrictions and coal produced from the mines can be exported by the developers to other countries.
