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Mr Viresh Oberoi, Managing Director and CEO, Metaljunction (left), Mr P.C. Parekh, Secretary, Coal (centre), and Mr P.S. Bhattacharya, CMD, BCCL, during the launch of Coaljunction in Kolkata on Monday. — Parth Sanyal

Kolkata , May 16

METALJUNCTION Services Ltd, a 50:50 joint venture between Tata Steel and Steel Authority of India Ltd (SAIL), here on Monday formally launched its new e-auction coal sales services under the name "coaljunction." The new service line intends to leverage the power of Internet and e-commerce technologies to make coal available at market-driven prices to all consumers, big and small, including traders.

Launching the service, the Coal Secretary, Mr P.C. Parekh, said the State-owned coal companies together would sell about 10 million tonnes (mt) of coal per annum through e-auction. The volume would be increased in phases. If everything went well, the Government had plans to sell entire production of domestic coal through this route.

Mr Parekh said that his ministry had approached the Union Cabinet to allow coal companies to sell at least 10 per cent of their total production through e-auction. But the Cabinet pegged the volume to only 10 mt to see how the system works. He argued that coal companies under the administrative control of Coal India Ltd (CIL) had so far acted as producers and distributors of coal. They now wanted to market their coal during the post-deregulated regime in the domestic coal sector.

In fact, Bharat Coking Coal Ltd (BCCL) has already initiated e-auction sales on trial basis from utilising services of Metal Scrap Trading Corporation (MSTC). The services of coaljunction would be used now by all subsidiaries of CIL, including BCCL.

Mr Parekh admitted that based on the current level of production, the demand and supply gap in coal might be about 15 mt for coking coal and 10 to 20 mt for non-coking coal, and the gap might widen to between 25 and 30 mt by the end of Eleventh Plan (2010-11). However, he ruled out the continuation of any gap as new capacities of about 50 mt would be added to the system through implementation of various new projects by the State-owned coal companies.

The Coal Secretary advised bulk coal consumers in the coastal states to depend more on better quality imported coal because such import would ultimately be cost competitive vis-a-vis domestic coal. They should not transport high ash content coal from the mines located far away from their units, incurring extra railway tariff.

The Managing Director of metaljunction, Mr Viresh Oberoi said that coaljunction had been launched to bring about efficiency and transparency to the way coal is sold.

The other objective was to bring about fair market price realisation for CIL and its subsidiaries. Mr Oberoi said that coaljunction would at present confine its services to the state-owned coal companies. A complete range of buying, selling, financial, inspection and logistics services would be provided.

According to him, metaljunction began its operation in 2001 only with steel products while its first year's turnover was about Rs 94 crore. Though the turnover grew over Rs 4,000 crore in the year 2004-05, it expects to achieve a turnover of about Rs 8,000 crore during the current fiscal (2005-06) as new business is to come with the launching of e-auction for coal sales. About Rs 2,000 crore is expected to be earned from e-auction of coal.

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