Coal India Limited (CIL) has announced significant policy changes to make coal supplies more flexible for non-regulated sector (NRS) customers. In a decision taken on November 13, 2024, the company will now allow coal supplies beyond the annual contracted quantity (ACQ) in long-term linkage auctions.
The shares of Coal India Limited (CIL) were trading at ₹405.55 down by ₹6.70 or 1.63 per cent on the NSE today at 3.05 pm.
Previously, customers were limited to obtaining coal linkages up to 85 per cent of their installed capacity. The new policy enables NRS consumers to access coal over their standard allocation. A performance incentive of 50 per cent of the bid price will be charged for coal supplied above 100 per cent of the ACQ.
The changes, effective from the upcoming eighth tranche linkage auction, introduce two key modifications. First, customers can now transfer coal between their own plants within the same sub-sector group. Second, they can switch transportation modes between rail and road at no additional cost.
Since the introduction of long-term linkage auctions in 2016, CIL has already booked 177.6 million tonnes of coal through seven previous tranches. The company is also reducing the time between linkage auctions, now conducting approximately 1.5 auctions annually, compared to the previous cycle of 18 months.
The auction will initially focus on cement and captive power plant sub-sectors.