Indian traders can now export CIL’s coal

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New Delhi: In a major development, state-run Coal India Ltd (CIL) has lifted the embargo on coal exports under its e-auction sales policy. Now coal purchasers, including traders, can export the coal bought through this route.

This assumes significance given that CIL is India’s largest coal miner, with the allocation under spot e-auction and special spot e-auction accounting for 46 million tonnes (mt) of coal in FY21.

“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,” CIL said in a statement on Friday.

With global shift to green energy to address growing environmental concerns, the Indian government is pulling out all stops to harness coal reserves within the next three decades. India has the world’s fourth largest reserves and is the second-largest producer of coal.

“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,” the statement added.

CIL has a coal production target of 670 mt for the current financial year. India’s overall coal requirement is expected to go up to 1,123 mt by 2023 from the present level of 700 mt.

This comes in the backdrop of India’s coal production registering a marginal dip in the second half of FY21 after falling sharply in the first half.

“India’s coal production reported a marginal fall in the second half of FY21 as against a sharp fall in production in the first half. In the second half of FY21 coal production by CIL and SCCL (accounting for 90% of total output) fell by just 0.5% after falling by 6.5% in the first half of the year. This helped in restricting the annual fall in coal production at just 2.9% in FY21 compared with FY20. Coal output of CIL fell by a meagre 1% to 596.3 million tonnes (mt) in FY20. However, SCCL’s output fell by a sharper 21% to 50.6 mt,” CARE Ratings said in a statement on Friday.

Offtake from CIL fell more than a fifth in April as the second wave of the pandemic left several contract workers battling the deadly infection as reported by Mint earlier.

“In FY22, the resurgence of the covid-19 pandemic once again hit demand and production of coal in the month of April 2021. Offtake of coal from all user industries like power, steel and cement remained weak during the month. Besides, CIL reported 100 million tonnes of inventories at its pit heads at the beginning of FY22. Large stock of coal supplies amid muted demand led to slower ramp up of operations during the month. Large number of employees from both CIL and SCCL tested positive for coronavirus in the second wave which also hampered operations,” CARE Ratings said in a statement.

“However, we do expect a recovery in the coming months due to pick-up in power demand as industry gets back towards normalcy,” the statement added.

In the largest ever coal mine auction, India is bidding out 67 mines with a total resource base of 36 billion tonnes of fossil fuel in the second tranche of commercial coal mine auctions. Of the 67 blocks being auctioned, while 37 are fully explored, the balance 30 have been partially explored. These mines are spread across Chhattisgarh, Jharkhand, Odisha, Madhya Pradesh, Maharashtra and Andhra Pradesh.

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