CIL to hold auction of coal linkages for sponge iron sector on Tuesday

Coal India will conduct the auction of coal linkages for the sponge iron sector on Tuesday -- the first sale of the dry fuel for non-regulated industries through bidding route.

The Coal Ministry has directed Coal India Ltd (CIL) to conduct the auction of coal linkages for the non-regulated sectors such as cement, steel/sponge iron and aluminium with a view to ensuring fuel availability to end users.

Coal India last week said that the first sale of coal linkages would be conducted for the sponge iron sector.

A source said that "the first phase of the auction of coal linkages would be held on May 31, 2016, for sponge iron units".

The source said that the public sector unit (PSU) has also organised a pre-bid meeting with sponge iron consumers with regard to auction of linkages for the sector to explain different features of the auction process.

CIL has decided to allocate a total quantity of around 23.25 million tonnes per annum (MTPA) in the first tranche of coal linkage auction, a source said.

Auction of coal via linkage from Singareni Collieries Company Ltd (SCCL) will be done subsequently, the source added.

"The Phase I of tranche 1 would be for 'Sponge Iron' sub-sector. The total quantity of approximately 2 MTPA has been allocated for sponge iron sub-sector under Phase I," the source said.

The government had earlier said that allocation of coal linkages for non-regulated sector industries will be only through the auction route to ensure transparency.

Sectors included are cement, steel/sponge iron, aluminium, and others (excluding fertiliser, urea).

The framework attempts to make coal available in a fair manner to end-users, Power Minister Piyush Goyal had earlier said.