CIL allocates 30% less coal under spot e-auction in Nov

State-owned Coal India Ltd (CIL) had allocated 3.1 million tonnes of coal under spot e-auction in November 2016, down 29.5 per cent from the year-ago period.

The decline comes amid government's goal of securing availability of coal to meet the demand of various sectors, including power.

According to government data, CIL had allocated 4.4 mt in November 2015.

During April-November period of the ongoing fiscal, CIL has allocated 36.8 mt of the fuel against 36.5 mt in the same period of the previous fiscal, the data said.

According to PWC's Kameswara Rao, the volumes traded on e-auction are small, and downside price movements tend to get magnified when larger core demand is being satisfactorily met.

Buyers get confidence that coal producers are capable of stepping in to meet any spurt in demand and so place lesser premium on short-term purchases. This also coincides with lower demand from both, power producers and the industry, he said.

"However, as demand picks up, and with global prices at nearly double that of last year, auction prices would firm up in coming quarters," he added.

Under e-auction, coal is sold at spot market price.

CIL had introduced the Spot e-Auction Scheme 2007 to enable coal buyers to buy coal through a simple, transparent and consumer-friendly system of marketing and distribution of coal.

Coal India accounts for over 80 per cent of the domestic coal production and is eyeing 1 billion tonnes production by 2020. The PSU is eyeing 598 million tonnes in 2016-17.

CIL's output target likely to be set at 660 MT for FY18

CIL's production target may be set at 660 million tonnes for the next fiscal. "Coal India's production is likely to be set at 660 million tonnes (MT) for 2017-18," an official said.

A memorandum of understanding (MoU) between the government and Coal India Ltd (CIL) on the production target for the next fiscal is yet to be signed.

"The MoU parameters are yet to be finalised" and discussions on the same are underway, the official said.

Due to various problems like land acquisition and resettlement and rehabilitation, CIL may not achieve the production target of 598 MT for the ongoing financial year and may end the fiscal with the production of 575 to 582 MT coal, the official informed. CIL's output in April-December of this fiscal stood at 377.7 MT, lower than the target of 417.5 MT.

It produced 54.2 MT of fossil fuel in December, lower than the target of 56.6 MT for the month.

The government had earlier said there were no plans to cut down coal output because the demand has already picked up now. In October, the demand started picking up for both coal and power sectors. Coal India, which accounts for over 80 per cent of the domestic coal production, is eyeing to produce one billion tonnes of fossil fuel by 2020.

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