One coal auction for all grades
The coal ministry is considering the consolidation of all types of electronic auctions done by Coal India to enable a better discovery of prices.
Speaking at a session organised by the Bengal Chamber of Commerce and Industry on Wednesday, Union coal secretary Anil Kumar Jain said the reforms were not yet over. “The grant of mining leases is one reform that has already happened. The next reform that we need to do is in marketing of Coal India’s production,” said Jain.
At present, Coal India has four windows for e-auction — spot auction, special spot auction, exclusive non-power sector auction and special forward auction for the power sector. In addition, a fifth window was provided in October to importers.
“We want to bring it all into one bucket. Let there be a market discovery of prices. These little buckets are no longer serving the purpose. They are in fact enhancing the price to some sectors,” Jain said adding that the move to put all of them together could bring some sense of “balance and satisfaction” in the market.
But industry sources point out that different consumers may have different preferences for coal grades and mines and those necessities have to be taken into consideration while consolidating the auction windows.
Incidentally volume booking in e-auctions for the first seven months of the ongoing fiscal ending October at 59 MTs, increased by 28 MTs translating into a growth of 90 per cent and the trend sources indicate has continued in November.
Sales through e-auction commands a better premium compared to supply through agreements. E-auction booking during the first seven months of the current fiscal ending October fetched a premium of 10 per cent over the notified price.
Jain also said that the government collects around Rs 800 crore per annum into the National Mineral Exploration Trust. The leaseholders contribute 2 percent of royalty to the trust.
Coal is the biggest contributor and with the production likely to go up to 1 billion tonnes, with commercial mining coming in and also the mineral sector closely following, Jain said that contributions to the trust can cross Rs 1000 crore which can then be deployed for gathering baseline geoscientific data.