Stability Wins: CIL's Decade-Long Coal Supply Deal for NRS

Coal India (CIL) has initiated the seventh tranche of the linkage auction to the non-regulated sector (NRS), extending the tenure of the fuel supply agreement (FSA) to a decade starting with this tranche. This strategic move aims to offer prolonged certainty in coal supply through linkage auctions to the NRS.

In response to the coal demand within the sponge iron sub-sector, the seventh tranche of the linkage auction commenced in late December 2023. CIL remains steadfast in ensuring coal supply to meet the normative requirements of various industrial sectors, including sponge iron. Regular linkage auctions, aligned with government-approved policies, are conducted to establish enduring coal linkages.

In the preceding tranche (Tranche-VI) of the linkage auction for the sponge iron sub-sector, an impressive 99 percent of the total offered quantity of 11.05 million metric tons (MT) was successfully booked, resulting in 10.98 MTs being secured. Notably, the South Eastern Coalfields (SECL) and Mahanadi Coalfields (MCL) jointly accounted for 86 percent of the total offered quantity, amounting to 9.5 MT.

In SECL, out of the total successful booking of 7.64 MT by the sponge iron units, 3.88 MT (51 percent) was converted into FSAs. Similarly, in the case of MCL, 1.44 MT out of the total booked quantity of 1.83 MT was converted into FSAs. Recognizing the need for flexibility, CIL extended the timeline for the signing of FSAs by an additional 75 days, exceeding the norm of 90 days.

In addition to ensuring a long-term and consistent coal supply through linkage auctions, CIL is facilitating a single-window e-auction, providing consumers with an open platform to meet their short-term coal requirements. This multifaceted approach underscores CIL's commitment to meeting diverse coal demands across different sectors.

News by Rahul Yelligetti