Coal India introduces special spot e-auction scheme to reduce dependence on imports

KOLKATA: Coal India has introduced a special spot e-auction scheme for importers to boost sales and reduce India's dependence on imports. Buyers including traders who imported coal after March 2018 are eligible for bidding under the scheme.

In a notice, Coal India said: “Special Spot e-auction Scheme 2020 for import substitution (only for coal importers) is being introduced…to attain 'Aatma Nirbharta'. Coal distribution through this scheme…aims to provide access to indigenous coal to…importers. Such importers may be importing coal for self-use or for sale within India.”

Coal India will soon notify the e-auction events for the period August 2020 to March 2021 under the scheme and coal companies will draw specific programmes for e-auctions.

A buyer can lift as little as 25,000 tonnes under the scheme if delivery is on trucks, and can opt for additional lots of 1,000 tonnes. In case, coal is supplied on goods trains, the minimum bid quantity will be 50,000 tonnes which is equivalent to 12 goods trains’ carrying capacity. Incremental bids will have to be 4000 tons or one train.

Bidders will need to quote prices in increments of Rs 10 per tonne over the floor price to begin with. It will be increased to Rs 20, Rs 30 and Rs 50 on a per tonne basis gradually as competition intensifies. The scheme will offer buyers the option of lifting the coal within, three, six or 12 months.

According to Coal India several non-power plants are importing coal from different countries for blending purposes or direct use. A need has arisen for consumption of domestic coal instead of imported coal to save foreign exchanges as sufficient domestic coal is available with Coal India, the company said in a recent circular.

At present Coal India’s stocks are at an all-time high of 75 million tonnes, while stocks at power plants have touched 44 million tonnes.

Coal India is currently in talks with sponge iron, cement, and captive power plants for offering coal on import substitution basis. The miner along with coal ministry have decided to bring down imports for the purpose of blending to zero this year. The plan is to tie up with consumers for substituting long term import requirements.