Under e-auction, state-owned CIL's coal allocation to power sector drops 27.9%

Under e-auction, state-owned CIL's coal allocation to power sector drops 27.9%


CIL’s coal allocation to power sector has declined with forward e-auction through which government aims to give access of coal to consumers who are willing to have an assured supply for a longer period. Bolstering the sector, private entities such as Vedanta, Hindalco, Adani Group in Talabira and other locations have started their operations

Under special forward e-auction, the coal allocation of state-owned Coal India Ltd (CIL) to the power sector dropped by 27.9 per cent to 2.19 million tonnes (MT) in April 2021. In the month of April last year, PSU had allocated around 3.04 MT. 

However, from 27.12 MT in FY’20 to 39.33 MT in FY’21, the coal allocation by CIL under this scheme has risen, as per the recent monthly summary by the Ministry of Coal for the Cabinet.

Forward e-auction was introduced to offer equal opportunities through single window services. It was aimed at giving access of coal to consumers who want to have assured supply for one year and so on for their functioning.

CEO NITI Aayog Shri Amitabh Kant also applauded the auctions for commercial mining. “Start of commercial coal mining is the most revolutionary and progressive measure taken in the coal sector of the country. It will bring the leading miners with latest technologies and cost competitiveness in the Indian coal sector. Indian coal sector will witness huge improvements in productivity and modernisation,” he said. 

On the other hand, apart from CIL, private entities have also forayed into the coal sector and are getting great opportunities to access coal mines, which is promoting productivity and competition. Previously, a coal mining agreement was signed between NLC India Ltd and Adani Group Talabira coal blocks. The project was assumed to generate a revenue of Rs 12,200 crore. After being appointed as the mine developer-cum-operator (MDO) for the Adani Talabira II and III mines, the shares of Adani Enterprises also went up by 3 per cent.

Vedanta and Hindalco Industries were among the initial private entities selected for operating coal mines in India. More and more players are welcomed in the sector to solve the challenges related to fuel shortage which affect the nation’s industrial activity. The move is also said to bolster India’s economy from the economic toll of the ongoing pandemic. The authorities also expect that these steps will create several job opportunities and add more to the annual revenue.