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OCT 17 2015

Non-power consumers of coal will have to take part in CIL's auctions

  • Economic Times, ET Bureau / Hyderabad
  • Created: Sat 17th OCT 2015

The non-power consumers of coal, which have been receiving supplies on an ad hoc basis from Coal India, will now have to participate in the miner's coal auctions, which will be on the same lines as spot eauctions, according to a senior executive.

Coal consumers primarily in the cement and steel sectors had been allotted coal blocks and were being supplied by Coal India ill the time their blocks were to start production. However, even after the Supreme Court last year cancelled all coal blocks allotted by the government saying they were illegal, these companies continued to receive the same quantity of coal.

According to the executive, who did not wish to be named, it was recently decided that coal supplies to them will stop. These companies will now have to buy coal through auctions in which other non-power consumers can also participate. Coal India has decided to allot 4 million tonnes of coal through auctions, the executive said.

The largest volume, about 1 million tonne, will be of fered by CIL subsidiary Mahanadi Coalfields Ltd, followed by South Eastern Coalfields and Central Coalfields at 80,000 tonnes and 70,000 tonnes, respectively .

Coal consumers, however, are not happy with the way coal is being offered to them.They allege that evacuation from the mines mentioned under the scheme could be exorbitant, as these mines are far away from projects.They will then be forced to buy from a colliery far way .This can have a bearing on their decision to participate in the auctions ..

Some collieries are offering premium coal, which is already exorbitantly priced. Being placed in eauction with a premium will result in costs of such coal getting unaffordable for power plants.

"Mines earmarked for auction in MCLSECL are not properly distributed, as these mines have either very high grade or very low grade coal, as a result plants nearer to these mines will be unwilling to participate due to high price or very low grade," a coal consumer said. "These issues can be addressed by earmarking both high grade and low grade coal from each subsidiary for both power and nonpower consumers," he said.

Tags

Coal Coal India Limited Mahanadi Coalfields Ltd CIL Power Consumer India

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