NEW DELHI: Coal India will increase spot auctions of the fuel in the coming months, the Chairman of the world’s biggest coal miner said as the company’s rising output has left it with enough fuel to meet increasing demand from non-utility power plants
An increase in spot auction sales, which offer higher margins than its mainstay long-term contracts, will help Coal India to build record profits from this year and maintain its rising share price, which has climbed 25 pc since April.
“I think in the first half, we have done a little over 30 million tonnes. In the next half, our e-auction sales may go up to 40 million tonnes,” Coal India Chairman Pramod Agrawal said.
The state-run miner, which accounts for 80 per cent of the country’s output of the fuel, typically supplies the bulk of its output to utilities as a part of longterm contracts. However, with output growing by 16.7 pc this fiscal year, putting the company on track to achieve its annual production target for the first time in 16 years, Coal India was able to boost electronic spot auctions this year using the excess after honouring the longterm contracts.
“If the power demand growth remains within 5 pc to 7 pc range (in 2023-24), and we produce the targeted 770 million tonnes, auction sales will increase by another 3-4 pc from this year’s levels,” said the Chairman.
