Govt approves 'CoalSETU' for auction of coal linkages without end-use restrictions

New Delhi, Dec 12 (PTI) The government on Friday approved the 'CoalSETU' window for the auction of coal linkages for diverse industrial uses and exports to ensure fair access and optimal utilisation of the resource.

The Union Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, approved the Policy for Auction of Coal Linkage for Seamless, Efficient & Transparent Utilisation (CoalSETU), according to an official statement.

The policy will allow allocation of coal linkages on an auction basis for long-term for any industrial use and export by adding a separate window named 'CoalSETU' in the NRS (Non-Regulated Sector) Linkage Auction Policy of 2016.

Any domestic buyer requiring coal can participate in the linkage auction, irrespective of the end use, Information and Broadcasting Minister Ashwini Vaishnaw said, briefing the media about the Cabinet decision.

The coking coal will not be offered under this window, he said.

The minister further said that the country has produced so much coal that we can start looking at exports, and the government is now focusing on the promotion of coal exports.

Linkage holders can now export up to 50 per cent of their quantity and flexibly utilise the fuel among group companies as needed.

According to the existing framework, coal linkages are given through the auction route to certain specified non-regulated sectors, including cement, steel (coking), sponge iron and aluminium.

The existing coal supply arrangements to non-regulated sectors needed revision "in view of the evolving market conditions, and with the objective of improving ease of doing business". Accordingly, it has been decided to extend coal linkages in the NRS to consumers without end-use restrictions, the statement said.

The move is expected to accelerate the utilisation of domestic coal reserves and reduce dependence on imported coal to meet the country's energy requirements.

"The present auction of coal linkages for the specified end-user sub-sectors in NRS (Non-Regulated Sector) shall continue. The specified end-user can also participate in this window," the statement said.

The modification comes in tandem with the opening up of the coal sector for commercial mining, a move which enabled the allocation of coal blocks without any end-use conditions.

Coal linkages allocated through the CoalSETU window are permitted for own consumption, coal exports, coal washing, or any other purpose— except domestic resale, it said, adding that participation by traders will not be permitted under this new window.

The coal linkage holders can export up to 50 per cent of their allocated quantity. They may also flexibly allocate the coal among their group companies as needed.

To meet rising demand for washed coal, allocations to washery operators will boost the domestic supply of washed coal, cutting import reliance. Washed coal may also be exported to international markets, it said. PTI SID HVA