Financial Daily from THE HINDU group of publications
Wednesday, Aug 10, 2005
Financial Daily from THE HINDU group of publications Wednesday, Aug 10, 2005 |
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Corporate
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Alliances & Joint Ventures Industry & Economy - Coal CIL may be jt venture partner in CoalJunction Pratim Ranjan Bose
Kolkata. Aug. 9 COALJUNCTION may soon be a 50:50 joint venture between MetalJunction Services Ltd (MJSL) and Coal India Ltd. MetalJunction recently decided to float a joint venture to carry out the e-auction of coal. MJSL, a joint venture between Tata Steel and SAIL, introduced e-auction of coal in support of CIL in May this year. According to sources, the joint venture proposal from CIL came following unexpected success of CoalJuncton. CIL was initially apprehensive about the benefits of such a venture. Accordingly, the Cabinet Committee of Economic Affairs had allocated 10 million tonnes of coal for sales through CoalJunction during 2005-06. A large number of medium-scale companies (especially mini cement plants, brick-kiln and coke-oven operators) who were otherwise not offered linkage by coal companies, joined the race for booking their provisions through e-auction, with the result that the 10-million-tonne allocation was exhausted in just two months. The coal companies were happy because they got a 50 per cent increase in realisation on an average. Sources said that normally such customers get their supplies through middlemen who pocket a large part of the margin. The coal companies have persuaded the Government to release another 10 million tonnes this month which, say sources, may not be sufficient for the year as the off-take is expected to increase in winter. The MJSL Managing Director, Mr V. Oberoi, said that he expects CoalJunction to trade a minimum of 30 million tonnes this year alone. "We expect to sell 10 million tonnes by September. This is irrespective of the fact that we are passing through a lean season when demand for coal remains subdued." MJSL is not hopeful of supplying coal to major steel plants in the foreseeable future.
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