Centre may seek nod for coal exchange

The coal ministry is likely to seek approval for setting up India's first coal trading exchange as part of its action plan for the first 100 days of the new government, an official told ET.

The plan had been pending and was initially expected to be launched last fiscal. A coal trading exchange could facilitate more sellers and buyers to trade coal as a commodity and go beyond term linkages. "Coal trading will provide a transparent mechanism for captive and commercial auction holders [who won coal blocks in commercial auctions] to sell coal.

This will also help in getting better prices for consumers," the official cited earlier said. Any surplus stock remaining with state-run Coal India Ltd after meeting long-term linkage commitments is also likely to be traded on the proposed exchange.


The coal exchange would also enable efficient market-based pricing mechanisms and facilitate price discovery and signalling, the official said. The ministry has taken steps to upgrade mechanised coal transportation and loading systems under 'first mile connectivity' projects.

The ministry also wants to add 600 MW of thermal power installed capacity by NLC India Ltd, according to the official. Coal gasification projects will also be part of the plan that could be implemented in the given tenure. The ministry plans to bid out about 10 coal gasification projects, the official said.