CIL extends fuel supply agreement tenure

New Delhi: State-owned CIL on Tuesday said it has extended the tenure of fuel supply pact to ten years from the earlier five years for the non-regulated sector. The move aims at ensuring long-term assurance of coal supply through linkage auction to the non-regulated sector. Coal India Ltd (CIL) has begun the seventh tranche of the linkage auction to the non-regulated sector within days of completion of the sixth round. "CIL has proactively increased the tenure of fuel supply agreement (FSA) to 10 years, beginning with the seventh tranche," the company said in a statement.

For sponge iron sub-sector customers, the seventh round of linkage auction started in the last week of December to meet their coal demand, even though the conversion ratio of successful bids into FSAs was low by this sector in the sixth round. "CIL is committed to supplying coal to the extent of the normative requirement of all industrial sectors including sponge iron. In this endeavour, regular linkage auctions, as per the government's approved policy are being conducted for long-term coal linkages," a senior official of the PSU said.

The response in the sixth tranche of linkage auction for sponge iron sub-sector has been rousing with 99 per cent of the total offered quantity of 11.05 million tonne (MT) being successfully booked. Coal India arms South Eastern Coalfields Ltd (SECL) and Mahanadi Coalfields Ltd (MCL) accounted for 86 per cent of the total offered quantity at 9.5 MT.