Coal India to revise E-auction norms for better market efficiency

NEW DELHI: State-owned Coal India Limited (CIL) is set to revise its e-auction norms by reducing the earnest money deposit (EMD) and increasing coal quantities offered for auction. The adjustments aim to meet existing local coal demand more effectively.

Currently, CIL’s e-auction scheme operates on a single-window basis, allowing consumers to select their preferred coal transport mode.

Additionally, CIL plans to overhaul its auction and allocation processes. A concept note seeking feedback from e-auction bidders was circulated on July 11. Proposed changes include a shortened three-hour auction window, the flexibility for consumers to switch transport modes post-bid without additional costs, and allowing up to four bids per basket per bidder, compared to the previous limit of one.

The company intends to step in to meet any latent demand as well. From CIL’s sidings alone the rake loading on average was 316.7/day in the current fiscal year with a jump of 40 rakes/day over the same period last year. The move to lower EMD in e-auctions by more than a third from Rs.500 per ton of coal to Rs.150 per ton is to encourage increased participation, as blocked capital of consumers will be eased.

With more cash availability at their disposal, consumers could switch over to more auctions with the same capital. CIL has asked all its subsidiary companies, except Northern Coalfields Limited, to spike up their offer quantity under e-auction to 40% of their respective total production for the second and third quarters of FY 2025.

Further, CIL will offer flexibility in setting reserve prices based on local demand-supply dynamics, loading modes, coal stock levels, and previous e-auction bookings. Currently, coal stock at thermal power plants stands at approximately 45 MT, a 33% increase from last year. CIL’s goal is to fulfill domestic coal needs and address any emerging demand.