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Coal Block Auctions - Block Winners can use Coal at Any Plant Now

Coal News - Published on Mon, 16 Sep 2019

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ET reported that successful bidders of the current round of coal block auctions can use extracted coal at any of their plants including those at subsidiaries, provided the end-use plant is similar to the one specified during the auction. Earlier, operators were tied to the plant specified during the auction. The Centre, however, has rejected prospective bidders’ request of selling coal to Coal India at notified prices for the non-regulated sector, which is almost 20% higher than notified. They asked for a higher price as this round of auction was for the non-regulated sector for which Coal India charges higher.

Initially, the Centre had said that sale to Coal India will be at a discount of 15% on the notified price for sectors other than power utilities. Subsequently, they clarified that such a sale will be at a discount of 15% over the notified price for the power sector as well, offering Coal India over 20% margin for selling this coal in the open market. A block operator can sell up to 50% of their produce to Coal India in a year.

However, utilisation of coal at any other plant by the bidder would be subject to the ministry’s scrutiny and prior approval from the Centre. A senior executive from a prospective company said that the block operator needs to inform the government at least 30 working days before it starts to divert coal to any other plants.

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Posted By : Rabi Wangkhem on Mon, 16 Sep 2019
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