India Raises Coal Sale Cap for Small, Medium Firms to Clear Glut

  • Purchase limit more than doubled to 10,000 tons a year
  • Coal India to also spot auction additional 20 million tons

India has more than doubled the amount of coal small and medium companies can buy as the country aims to boost domestic sales of the fuel to reduce a glut.

The cap was raised to 10,000 metric tons a year, from 4,200 tons set almost nine years ago, the coal ministry said in a notice dated Tuesday. The new guidelines also allow any company, regardless of size, to buy up to the maximum amount, which broadens the number of potential customers, S.N. Prasad, marketing director at state-run miner Coal India Ltd., said by phone.

“Some of the consumers have grown bigger and are no longer small or medium companies,” Prasad said. “The change in the definition would allow them to buy.”

Kolkata-based Coal India is struggling to sell all its output as it seeks to achieve a government-set goal of raising annual output to 1 billion tons by the end of the decade. Demand growth has been slack as power plants, which bought about 75 percent of the miner’s output during the last fiscal year, are running below capacity.

Coal India, which produced 539 million tons last year, also said Tuesday that it plans to sell an additional 20 million tons of the fuel in spot auctions during the current fiscal year.

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