Revolutionary changes in Coal India’s auctions—More Coal, More Power!

Coal India Limited (CIL), the largest coal-producing company in the world, has announced significant changes to its e-auction process to more effectively meet the growing local coal demand. As part of these changes, CIL has reduced the earnest money deposit (EMD) required for bidding in e-auctions from Rs. 500 per ton to Rs. 150 per ton. This reduction aims to increase participation by easing the financial burden on consumers, allowing them to engage in more auctions with the same capital.

Enhancing Flexibility and Efficiency in Coal Auctions

CIL has transitioned to a single window mode agnostic e-auction scheme, where consumers can choose their preferred mode of coal transport, enhancing flexibility and accessibility. In a move to streamline operations and increase efficiency, CIL is also planning to revamp its auction and allocation methodology under its electronic window. A concept note seeking feedback was circulated to e-auction bidders on July 11.

The proposed changes include a shorter, three-hour auction window to replace the previous longer process. Additionally, the new rules will allow consumers to switch their mode of transport from rail to road post-bidding without incurring an additional premium. Furthermore, bidders will now be able to place up to four bids per basket, an increase from the previous limit of one bid per basket.

Coal India Limited is enhancing its e-auction process to meet increasing domestic coal demand more effectively and efficiently.

Operational Improvements and Increased Coal Supply

CIL’s operational improvements are already evident from the increased coal supply. Rake loading from CIL’s sidings has averaged 316.7 per day in the current fiscal year, a significant increase of 40 rakes per day over the same period last year. This has been instrumental in addressing the latent demand for coal.

Moreover, CIL has instructed all its subsidiary companies, except for Northern Coalfields Limited, to raise their e-auction offering to 40% of their total production for the second and third quarters of FY 2025. This adjustment is intended to cater to the reserve price in e-auctions, which is determined by adding a certain percentage to the notified price of coal. Subsidiaries now have the flexibility to set their reserve prices based on various factors, including the local demand-supply scenario, the availability of different loading modes, and existing coal stock levels at mines.

Impact on Coal Stock and Energy Security

Currently, coal stock at thermal power plants stands at nearly 45 million tonnes, which is about 33% higher than the same period last year. This robust stock level is part of CIL’s strategic intent to fully meet domestic coal demand and address any latent demand within the system.