The power ministry had said last week that e auctions should be stopped until enough coal is supplied to power plants. About 10% of the coal is sold through this electronic auction platform every year. E auction is a major revenue earner for CIL as coal is sold at 80% to 90% premium over base prices.
CIL intends to sell around 45 million tonnes coal this year through e auction of which around 5 million tonnes is likely to be through forward auction.
Mr Jaiswal said that "Any step to curb e auction will only increase pithead stock. E auction of coal was stopped due to litigations soon after it was started. It was resumed after the Supreme Court allowed it. There is already a huge stock of coal lying at pitheads which is creating problems. If e auction is stopped another 10% stock will accumulate."
CIL's pit head stocks at present is about 64 million tonnes, down a little from about 70 million tonnes during the beginning of the current financial. Large stocks of coal if accumulated at a single location catches fire, specially during summers, leading to destruction of stocks, hence CIL is always trying to reduce its pit head stocks.
On coal block auction, Mr Jaiswal said that "The competitive bidding round for coal blocks in the country will be held soon."
Though the exact number of coal blocks that will be put on auction is not known, it is believed that the government is ready with 50 to 75 blocks. The launch of the competitive bidding rounds were delayed due to the controversy over classification of certain coal blocks as 'Go' and 'No Go' areas by the Environment Ministry. The issue is likely to be resolved at the scheduled review meeting convened by Prime Minister Manmohan Singh on coal production on June 7th 2011. CIL can also participate in the coal block auction if it feels so. (sourced Economic Times)