The coal delivered from the mine that reports to the coal preparation plant is called Run of Mine (ROM).
Stating about the broad guidelines for methodology for auction of coal linkages to non-regulated sector, including steel and cement, the ministry said in letter dated February 15 to both CIL and SCCL that if bids are received for quantity greater than 'link quantity' offered, then the premium is increased in steps.
The ROM price to be paid will be suitably indexed by CIL/SCCL for subsequent years. The successful bid premium shall remain constant over the contract period.
Maximum bid quantity by a particular bidder shall not exceed the normative requirement of the End Use Plant, the ministry said, adding that for auction of linkages, Coal India (CIL)/Singareni Collieries Company Limited (SCCL) shall chalk out annual or six-monthly auction calendar.
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"There shall be provision for Third Party Sampling of coal supplied," it said.
Government is planning to auction coal linkages of around 24 million tonnes in the first year.
"The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has given its approval that all allocations of linkages...For non-regulated sector...Shall henceforth be auction based," an official statement had earlier said.