NEW DELHI: India has decided to set up a coal trading platform, taking a giant leap towards completely throwing open the sector to market forces as the country gears up for commercial coal mining auctions, which will increase the number of sellers of coal.
As per the proposal, entire coal produced in the country will be traded on a ‘Coal Exchange,’ an online platform where pricing is determined transparently through demand and supply. The exchange is being thought out on the lines of commodity exchanges, power bourses or the proposed gas exchange. This could mean the end of new Fuel Supply Agreements (FSA) regime of Coal IndiaNSE 1.79 % where the state-run miner signs contracts for coal supply with consumers. Coal India Ltd is expected to remain a dominant player in the sector given its production target of one billion tonnes by 2024 and will sell incremental capacity at market prices, a senior government official said.
