KOLKATA (miningweekly.com) – State-controlled Coal India Limited (CIL) has received a “highly favourable response” to its forward e-auction programme, which it hopes will attract sales of at least 120-million tonnes of coal in the current financial year.

According to a CIL official, the response to its forward e-auction, against a backdrop of oversupply, is a “good” indication of the miner’s ability to maintain production, while efficiently managing its stockpiles, which were estimated at 53-million tons at the end of last month.

The company plans to continue to offer an estimated 60-million tons for sale on e-auction over the next six months to power and non-power bulk consumers, potentially increasing to 120-million tons for the full financial year, the official added.

In the latest round of forward e-auction exclusively for the power sector, which started early this month, CIL was able to secure bookings of around 18-million tons. This is said to be a significant achievement for the coal miner considering that data from the Central Electricity Authority shows that aggregate coal stocks with all thermal power plants in the country stand at 31-million tons, or the equivalent of about 23 days consumption, which is one of the highest stocks in the last eight months.

In another past forward auction held in April, the entire four-million tonnes on offer was booked by thermal power plants which had lost captive coal mines following a Supreme Court order, or where the plants’ existing fuel supply agreement with CIL expired in July 2016.

In a further drive to auction volumes, CIL has decided to offer blended coal, a mix of high and low gross calorific value (GCV) fuel, as an appropriate import substitution for imported coal-based coastal thermal power plants.

With the government putting in place restrictions and directing thermal power plants to progressively reduce coal imports, auction sales of blended coal will cater for the coastal thermal power plants, which are largely designed to use a mix of high GCV fuel as feedstock along with high-ash content coal to achieve a lower electricity generating cost of production.

Despite a 42-million-ton stockpile, the Coal Ministry has set a production target for CIL of 598.62-million tons for 2016/17, up from 538.75-million tons achieved in 2015/16.