• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

Kolkata, March 24 Coal India will roll out forward e-auction on coal on March 28.

Entry to the auction will be limited to consumers. The company will initially allocate seven million tonne for the forward auction.

The allocation may be increased to 15 mil tonne for 2008-09.

Mr K. Ranganath, Director-Marketing, told media persons here today that on behalf of CIL, the subsidiaries would offer their produce for forward auction beginning next week. Western Coalfields – a CIL subsidiary – had earned the distinction to be the first coal company to sell on forward auction.

Over all, CIL expects to sell approximately 40 million tonne of coal through spot and forward e-auction during the next fiscal.

Similar to the spot auction, the forward auction would also be launched on platforms provided by MSTC and MetalJunction.

According to Mr Ranganath, two-third of the total sales through forward auction will be underground coal.

Considering the better quality parameters and higher production cost of such coal, the reserve price for forward auction is also expected to be higher than the spot auction.

However, unlike the spot auction, the reserve price will be clearly underlined in the forward auction.

Interestingly, the forward auction may leave substantial impact on the bottomline of CIL’s loss-making underground operations. The coal major currently produces 33 million tonne of underground coal at an average cost of Rs. 1800 per tonne.

At an average price of Rs 900 per tonne, the company loses approximately Rs 3,000 crore annually on underground mining.

CIL is now targeting sell of a total of 12-13 million tonne underground coal through spot and forward auctions. A back-of-the-envelop calculation suggest that at an average of 40-50 per cent higher return (over and above the notified price) on one third of the total production from underground mines, the company is expected to reduce its losses by a few hundred crores.

According to sources, subsidiaries like WCL, South Eastern Coalfields, Eastern Coalfields and Bharat Coking Coal – having major underground operations – may be particularly benefited from the project.

Mr Ranganath though admitted the positive impact of forward auction on the underground operations, did not comment on the estimated gains to the company.

More Stories on : Coal | E-Commerce & E-Business

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Revenue picture unlikely to be distorted, says pay panel

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line