News Brief | February 2015
Quality of coal will determine block floor price
Floor prices for coal blocks that will be auctioned to steel, sponge iron, cement and captive power companies will vary from Rs 150 to possibly about Rs 500-600 per tonne, said several officials aware of preparations currently under way ahead of bids being sought. The floor price will be different for each block and will be a factor of the quality of coal, rising in line with the energy content.
Although the auction methodology only mentions that the floor price will not be less than Rs 150 per tonne, it does not give any indication on the upper limit.
The floor price for each block will be a factor of the energy content of coal the reserve holds and the price for a similar quantity of the fuel that Coal India sells to steel, sponge iron, cement and captive power units.