CIL to auction 60% stock by May

KOLKATA: Coal India plans to auction 60% of its inventory by May to liquidate stocks that touched a record 75 million tonnes in March.

The company has decided to reduce floor price for bidding, from 20%-30% above notified price, to the notified prices and bulk of the offer would be for auctions allowing consumers to lift booked quantities over several months.

The lockdown has hit coal demand as manufacturing and power generation has slowed down. Coal India executives said demand outlook is not promising for at least the first half of this fiscal.


Coal India is also expecting increased competition from imports as global coal prices have started to soften. Coal auctions are expected to help prevent the market from being swayed away towards import segment due to a possible drop in global prices.

Coal India has advised subsidiaries to prepare e-auction schedules to offer 60% of their opening stock in the first two months of 2020-21, with thrust on long-term offers like special forward and exclusive e-auction schemes, both by rail and road modes.

The company wants subsidiaries to immediately take steps for the auction so that accumulated stocks do not come in the way of achieving production targets.

Coal India will allow supplying the booked quantities on rakes. It will also extend the time limit for payment and acceptance of deferred payment letter of credit. For non-power consumers, the company has deferred payments to be made by consumers securing fresh supply contracts and e-auctions allocation schemes. It has also decided to allocate lesser number of rakes to non-power consumers facing unloading constraints.

Stocks at Subsidiaries

Subsidiaries	Stocks*
Eastern Coalfields	3.38
Bharat Coking Coal	2.33
Central Coalfields	13.47
Northern Coalfields	4.00
Western Coalfields	14.30
South Eastern Coalfields	17.79
Mahanadi Coalfields	19.31
Coal India Total	74.58
*Stock in million tonnes