CIL pulls restriction on exporting coal procured through two spot auctions

State-owned CIL on Friday said that it has removed the restriction on exporting coal procured through two spot auctions.

The development assumes significance as the current inventory of coal behemoth is little over 70 million tonnes (MT).

"In a major policy shift, Coal India Ltd (CIL), effective from June 8, paved the way for domestic coal purchasers including traders in allowing them to export coal procured under two categories of e-auction schemes," the maharatna firm said in a statement.

To this effect the company has tweaked its e-auction coal sale policy this week after its board gave the go-ahead.

"The country's largest coal producer and supplier has lifted the embargo on exporting coal procured through spot e-auction and special spot e-auction outlets. This is a first of its kind development since the introduction of spot e-auction in 2007," it said.

The existing clause 'coal procured under e-auction is for use within the country and not for export' has now been amended, opening the door for export of the dry fuel in two auction categories.

Allocation under spot e-auction and special spot e-auction together accounted for 46 million tonnes of coal in FY21 which was 37 per cent of the total allocated quantity of 124 MT during the year.

Spot e-auction at 42.5 MT was the highest allocated quantity under all the five auction windows, in FY21, fetching 25 per cent add on over the notified price, again the highest. Whereas, special spot e-auction netted a premium of 13 per cent over the notified price.

"Though Coal India would not be directly exporting coal, allowing those who procure coal under the two auction windows to export may prove to be catalytic to our sales. If there is favourable response outside the country, then we may witness more active participation as spot e-auctions book high volumes," the company said.

In case of export the requirement of complying with the government rules all statutory guidelines, regulations and legal obligations shall lie solely with the coal buyer and exporter.

Spot e-auction is meant for all categories of domestic coal buyers including traders. Special spot e-auction introduced in 2016 is similar in every way but the booked quantity of coal could be lifted over an extended time period.

"We feel upbeat about this development and hopefully witness an upsurge in auction bookings under the two schemes," the company said.

CIL accounts for over 80 per cent of domestic coal output.