Company execs say move would increase volume of trade on CIL’s e-auction platform
Shreya Jai |
Last Updated at June 11, 2021 18:45 IST
National miner Coal India ltd (CIL), has allowed its buyers from e-auction route to export the coal. CIL has tweaked its e-auction coal sale policy and has lifted the embargo on exporting coal procured through spot e-auction and special spot e-auction outlets
Company executives said the move would increase the volume of trade on their e-auction platform.
The existing clause ‘coal procured under e-auction is for use within the country and not for export’ has now been amended, opening the door for export of the dry fuel in two auction categories, said a statement by CIL.
CIL said this is a first of its kind development since the introduction of spot e-auction in 2007. Apart from the long term fuel supply agreements (FSA) that CIL signs with its customers in the power, steel, iron and other sectors, it also regularly hosts e auction of surplus coal. Buyers have to quote a premium over the notified price of coal as their bid.
“Though Coal India would not be directly exporting coal, allowing those who procure coal under the two auction windows to export may prove to be catalytic to our sales. If there is favourable response outside the country, then we may witness more active participation as spot e-auctions book high volumes”, said the statement by CIL.
In case of export the requirement of complying with the government rules all statutory guidelines, regulations and legal obligations shall lie solely with the coal buyer and exporter.
Spot e-auction is meant for all categories of Indian coal buyers including traders. Special spot e-auction introduced in 2016 is similar in every way but the booked quantity of coal could be lifted over an extended time period.
CIL executives said the move would boost the volume of trade with CIL through auction route. “We get premium over notified price in the auction. As now export would be allowed, we are expecting more industries to come forward and participate in the auction,” he said.
CIL witnessed a 52.5 per cent increase in its e-auction coal sales, in the first two months of the current fiscal year, over corresponding period a year before.
During the last financial year, allocation under spot e-auction and special spot e-auction together accounted for 46 Million tonne (MTs) of coal. Spot e-auction at 42.5 MTs was the highest allocated quantity under all the five auction windows, in FY’21, fetching 25 per cenr add on over the notified price, again the highest. Whereas special spot e-auction netted a premium of 13 per cent over the notified price.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.