Kolkata-headquartered Indian state-controlled coal mining company Coal India Limited (CIL) has decided to make preferential sales of coking coal to integrated government-owned steel producers under long-term agreements and only thereafter would surpluses be put up for sale through e-auction to other consumers, a company official said on Tuesday, June 6.
The official said that, even though this would somewhat impact revenues since revenues from e-auctions were higher than sales through long-term agreements, the move would ensure adequate supplies of domestic coking coal to government steel companies like Steel Authority of India Limited and Rashtriya Ispat Nigam Limited.
According to industry sources, CIL’s revenues from sales through e-auction averaged about 15-20 percent higher than sales through long-term supply agreements.
CIL, the sole domestic supplier, produces an estimated 53 million mt of coking coal, while domestic steel producers have to meet 70 percent of their total coking coal requirements through imports.