Govt to create dedicated auction window for long-term coal linkages

The official emphasised that the government is determined to reduce coal imports, as domestic production can meet the growing demand.
For representational purposes
For representational purposes

NEW DELHI: The coal ministry plans to create a dedicated auction window for long-term coal linkages, specifically for the non-regulated sector. This window will allow industries such as steel, cement, and others, to bid for coal without restrictions on its end use. Currently, the coal order is placed under the Shakti Policy, which caters to the power sector’s coal requirements.

For the non-regulated sector such as steel, cement, and fertilizer, it dictates the end use of the coal auction policy. Therefore, the government is planning to provide long-term supplies to these segments.

According to the ministry officials, the new auction window will reduce coal imports and enable small businesses, washeries, aggregators, and traders to secure long-term supplies. Currently, the only available window is the e-auction window for small or medium consumers, which offers limited quantities and is unreliable for long-term needs, forcing these sectors to rely on imports.

“This is why we are introducing a separate window for long-term linkages,” said the official. “We will soon send the draft for cabinet approval.

The official emphasised that the government is determined to reduce coal imports, as domestic production can meet the growing demand.

According to the ministry data, in FY24, the country imported 261 million tonne of coal, of which 65.73 million tonne were used for power generation, an 18.15% rise from the previous fiscal. The official noted that imported coal is expensive, with the Indonesian coal grade (ICI 5) costing Rs 5,198 per tonne, while the equivalent Indian coal (G14) produced by Coal India Ltd costs Rs 1,600 per tonne.

Similar price disparities exist for higher grades, with the ICI 1 Indonesian grade costing Rs 12,620 per tonne (including insurance and freight), compared to the equivalent Indian G3 grade at Rs 4,900 per tonne (including taxes and other charges).

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