Coal India begins tranche VII coal auction for NRS, extends FSA tenure to 10 years

Coal India has begun tranche-VII of the linkage auction to the non-regulated sector (NRS) and increased the tenure of FSA to 10 years
Coal India begins tranche VII coal auction for NRS, extends FSA tenure to 10 years
Coal India begins tranche VII coal auction for NRS, extends FSA tenure to 10 yearsEnergy Watch

New Delhi: Coal India Limited (CIL) has begun tranche-VII of the linkage auction to the non-regulated sector (NRS) within days of completion of tranche-VI. CIL has proactively increased the tenure of fuel supply agreements (FSA) to 10 years, beginning with the seventh tranche, to ensure long-term assurance of coal supply through linkage auction to NRS, said the state-run miner in a statement on Tuesday. For sponge iron, sub-sector customers tranche-VII of linkage auction has commenced in the last week of December 2023, to meet their coal demand, even though the conversion ratio of successful bids into FSAs was low, by this sector, in tranche-VI.

Coal India committed to supplying coal to fulfil normative requirements of NRS

“CIL is committed to supplying coal to the extent of the normative requirement of all industrial sectors including sponge iron. In this endeavor, regular linkage auctions, as per the government’s approved policy are being conducted for long-term coal linkages,” said a senior official of CIL.

The response in tranche-VI of linkage auction for sponge iron sub-sector has been rousing with 99 percent of the total offered quantity of 11.05 million tonnes (MT) being successfully booked. The booked quantity was 10.98 MT.

South Eastern Coalfields Limited (SECL) and Mahanadi Coalfields Limited (MCL) between them accounted for 86 percent of the total offered quantity at 9.5 MT. While SECL put 7.67 MT under the linkage auction hammer, MCL chipped in with 1.83 MT. Almost the entire quantity was booked.

Out of the total successful booking of 7.64 MT in SECL, by the sponge iron units, only 3.88 MT or 51 percent was converted into FSAs. In case of MCL, 1.44 MT got converted into FSAs out of the total booked quantity of 1.83 MT. CIL extended the timeline, in order to facilitate the signing of FSAs, by 75 days over and above the norm of 90 days.

Single window e-auction for all coal customers for short-term requirements

Apart from long-term assurance of regular supply of coal provided through linkage auction, CIL is also conducting single window e-auction where any consumer can participate and get coal for meeting short-term requirements.

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Ending December of the current financial year, 64 MT of coal was offered across CIL, of which 56.7 MT was successfully booked including 17.4 MT from SECL and 15.3 MT through MCL. With an increased availability of coal in the last quarter of the fiscal, the offer of coal is likely to increase further under the e-auction window. CIL is aiming to put 20 percent of the envisaged production of this fiscal’s fourth quarter under e-auction block.

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