Government owned and operated Coal India Limited (CIL) will hold a special e-auction of a long-term coal supply agreement specifically for the steel sector, according to sources in CIL.
The sources said that the auction of a supply linkage to be conducted by CIL is aimed to replace the system of allocating fuel to various steel industry segments on "nomination basis" and eliminate discretionary decisions while offering coal to the steel sector.
In the first instance, the special e-auction of a long-term supply linkage will be for sponge iron producers wherein various operational subsidiaries of CIL will offer a total of 7 million mt of coal for which sponge iron producers will have to bid.
In the second instance, CIL’s auction will offer 5 million mt of coking coal where steel producers require metallurgical-grade dry fuel for their blast furnace operations, the sources said.