October 07, 2008
CIL resumes E auction of coal
ET reported that Coal India Limited has resumed coal e auctions nearly a year after a court ruling had barred it in December 2006 and hopes to sell about 15 million tonnes of coal through MSTC and Metal Junction Services by March 2008.
A senior CIL official said that "The first lot of coal being auctioned on November 26th 2007 through the electronics route was from CIL subsidiary Eastern Coalfields and was sold on Metal Junction’s electronic auction platform. MSTC is scheduled to jump into the action on November 27th 2007 when it will sell coal extracted from Western Coalfields’ mines.”
He added that "E auction of coal was stopped on December 8th 2006. In the interim, CIL had started selling coal through the e booking mechanism where the price was pre fixed. Under the earlier route, we had offered about 16.4 million tonnes while 13.2 million tonnes were allocated. The new coal distribution policy announced by the government allows CIL to offload 10% of its total production e auction. However, since there are just four more months before the fiscal ends, we hope to end up doing 14 million tonnes by March 2008.”
The new e auction system, notified by the centre is subtly different from the old e auction one. Under the present system CIL will set a reserve price on its own for the coal it will be selling through this route. It has decided to keep the reserve price undisclosed and it will be as close as possible to the notified price. While the earlier system had a floor price decided by CIL. Under this system, precedence will be accorded to the highest bid price in the descending order as long as the offered quantity is available for allocation. However, if two or more buyers bid the same highest price, precedence for allotment will be accorded to the buyer who has placed the bid for the higher quantity.
Talking about schedules, the CIL official said that “Coal from Western Coalfields, Mahanadi Coalfields, Bharat Coking Coal, Central Coalfields, Northern Coalfields and South Eastern Coalfields will all be offered during these months. There will be two broad categories, one will be the mode of transport railways or roadways and the other will be mine specific.”
From next year, CIL will sell 10% of its total production through this mechanism.
