Standard Post with Image

Capacity Plus Premium Over RoM Price of CIL may Decide the Fate of Coal Linkages

News

The initial floor price for the proposed auction of coal linkages should be fixed on the basis of Run-of-Mine price and bidders have to bid for premium above this price for the relevant grade, an inter-ministerial panel has suggested.
Source: ET

SNP Insight

Premium above the fixed run-of-mine price of CIL for coal linkages as per the grade is likely to improve the reserve of already cash surplus company and may also pave the way for government 1.6 BT target of coal production. Also provision for third party sampling may improve the quality of coal and it may be benfecial for both the supplier and consumer.  The only issue is  the aggresiveness of the consumer for acquiring the linkages which may put the cost economy of end-use plant in pressure.
Source: SNP Infra Research