Coal news and updates

Significant rise in CIL’s e-auction offering, allotment in Dec

February 2: Triggered by a significant rise in production and higher supplies to the power sector that significantly improved coal stock positions at power plants, India’s leading coal producer, Coal India Ltd (CIL), offered significantly higher quantities of coal for sale through the e-auction platform in December 2014, according to provisional data available with ICMW.

The company offered a total volume of 7.23 million tons (mt) of various grades of coal in December, which was up nearly 4.5 mt as compared to 2.73 mt offered in November.

In October, the company had offered 1.19 mt of coal for allotment.

The allotted quantity too jumped to 6.15 mt in December from a low of 2.53 mt in November.

On a year-on-year basis, both the offered and allotted quantities were also higher by 4.48% and 9.04% compared to 6.92 mt and 5.64 mt seen respectively in December 2013.

The government, at the beginning of June, had directed CIL to restrict its offerings through the e-auction platform to 25 mt in a year after it was found that a number of power plants in the country were facing low coal stock position.

During the first nine months (April-December) of 2014-15, the total allotment through spot e-auction stood at 27.86 mt, whereas the offered quantity stood at 30.05 mt. During the corresponding period of 2013-14, the offered and allotted quantities stood at 48.06 mt and 40.47 mt, respectively.

The notified price of the allotted quantity in the first nine months of 2014-15 (April-December) stood at Rs 4,290.43 crore against which the bid price was Rs 7,184.68 crore. The notified price of the allocated quantity in the first nine months of 2013-14 stood at Rs 6,576.13 crore whereas the bid price was Rs 8,971.31 crore.

Many cement, power and sponge iron companies and brick kiln-makers in India depend on coal offered by CIL through e-auction as they do not have linkages to procure domestic coal.

Consequent to a decline in the offered quantity following the government directive over the past few months as compared to last year, the premium earned in the e-auction over the notified price in December stood at 50.84%. In November, it stood at a high of 91.78% which was, however, down from the October premium of 116.45% when the offered quantity was much lower. The premium earned over the notified price in September was at 96.75%.

In August, it stood at 86.1% compared to 74.02% in July while in June it stood at 73.54% against 57.98% in May as a large number of buyers rushed to acquire the small quantities offered through the online platform.

During December 2014, the notified price of the total allocated quantity of coal was Rs 844.32 crore while the realised value was Rs 1,273.57 crore.

In November 2014, the notified price of the total allocated quantity of coal was Rs 429.94 crore while the realised value was Rs 824.55 crore.

In October 2014, the notified price of the total allocated quantity of coal was Rs 215.71 crore while the realised value was Rs 466.91 crore. In September, the notified price of the total allocated quantity of coal was Rs 162.55 crore while the realised value was Rs 319.81 crore.

In August, the notified price of the total allocated quantity of coal was Rs 154.7 crore while the realised value was Rs 287.89 crore. In July, the notified price of the total allocated quantity was Rs 300.86 crore and the realised value was Rs 523.55 crore.

The notified price of the total allocated quantity in June stood at Rs 585.13 crore while the realised value was Rs 1,015.46 crore.

The total allotment of coal through spot e-auction during 2013-14 stood at 58.12 mt while the offered quantity was 68.86 mt. The offered and allotted quantities in 2012-13 stood at 52.43 mt and 44.26 mt respectively.

CIL had earned additional revenues of about Rs 3,500 crore by selling coal through e-auction in 2013-14. During 2012-13, the company’s additional earnings from this platform was slightly higher at Rs 3,711.97 crore.

The following table contains the quantity of coal (provisional data) allotted by CIL via the spot e-auction route during 2014-15, 2013-14 and 2012-13:

# Figures may not tally due to revision in data made by CIL for prior period.