New Delhi: State-run Coal India Ltd plans to relax the rules for e-auctions of coal and has asked its subsidiaries to increase their sales through such auctions in the next two quarters. In a statement on Friday, Coal India said it directed all its subsidiaries, except Northern Coalfields Limited, to offer up to 40% of their production in e-auctions during the second and third quarters of the ongoing fiscal year. About 20% of their production is currently sold through e-auctions.
On Thursday, the company circulated a concept note that included a proposal to allow each bidder to place up to four bids. The current limit is one bid. It also recommended a three-hour auction window to speed up the process, and proposed allowing consumers to change their mode of transport from rail to road after bidding, without paying an additional premium.
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To boost demand in e-auctions, Coal India said it has lowered the earnest money deposit (EMD) from ₹500 per tonne of coal to ₹150 a tonne. With more cash at their disposal, customers will be able to participate in more auctions with the same capital, it added.
The company has also given its subsidiaries flexibility on their reserve prices, allowing them to take into account factors such as demand and supply from various sources, coal stock at mines, and the results of previous e-auctions.
Coal stock at thermal power plants is at nearly 45 million tonnes, or about 33% more than in the same period last year. CIL intends to supply coal to meet domestic demand in full, and cater to any latent demand that may exist in the system as well, the statement said.
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Changes to coal auctions
On 2 July, Mint reported that the coal ministry is in the process of proposing changes to the way coal auctions are conducted so that small businesses across sectors can get steady, long-term supplies of the fossil fuel. The ministry is expected to circulate a draft note for the cabinet shortly, outlining changes to the policy on coal auctions that are aimed at benefiting small businesses in sectors such as steel, cement, fertilisers and captive power.
On Friday, shares of Coal India closed at ₹496.10 on the BSE, down 0.82% from their previous close.
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