Faced with an acute countrywide shortage of coal, Indian state-run miner Coal India Limited (CIL), which accounts for over 80 percent of domestic supplies, has decided to suspend spot sales of coal through e-auctions except for thermal power companies, a notice issued by the coal company said on Tuesday, October 26.
This in effect will mean that non-power coal consumers in sectors like steel, cement and fertilizers will be restricted to sourcing supplies of the dry fuel only to the extent stipulated in their long-term supply agreements and will not participate in e-auction sales to meet any incremental demand.
“In view of the current low-stock position at the powerhouse end, supply of coal is being prioritised to the power sector to replenish the dwindling stocks. Coal companies are advised to refrain from conducting any further e-auctions of coal, with the exception of special forward e-auctions for the power sector, until the situation stabilises," CIL said in a note issued to its wholly-owned operational mining subsidiaries.
“Once the situation stabilises, expectedly within a short time, and stocks at thermal power plants attain comfortable levels, other sectors will be brought back to their regular supply norm,” the CIL note said.
Coal supplies to non-power companies during April-September 2021 amounted to 18 million mt, 37 percent higher year on year.