Indian e-auction system launched - Quoted in Platt's International Coal Report

India's first electronic auction system designed to distribute coal to consumers has been launched, according to its developers, e-commerce firm, mjunction.

Developed by coaljunction, a business unit of mjunction, the eAuction process is expected to bring transparency and efficiency in the system, a company release said.
India's largest coal producer state-owned Coal India Ltd was the first company to use the eAuction system, for its Western Coal Fields Ltd on August 17.

Unlike normal e-auction, which supports quantum procurement and pricing determination for immediate lifting of coal, the forward eAuction will allow purchases and price fixation for future procurements.

The forward eAuction of coal will also provide equal opportunities to Indian coal consumers to purchase coal for their own consumption as required and at a pre-determined price through the process of on-line bidding, said the company release.

"This will help the consumers of coal get certainty of quantity and prices of coal for the future procurement and help the coal suppliers ascertain demand and hence, plan their mining activities accordingly," said Dipesh Dipu, Principal Consultant - Mining at PricewaterhouseCoopers. "This move is also significant as the mechanism is likely to indicate future price movements and set a direction to the expectations of industry players", said Dipu, adding that it would also be used as a hedging instrument for coal consumers.

Each forward eAuction shall be for a period of 12 months consisting of four equal quarters of three months each. The four quarters shall be fixed as January-March, April-June, July-September and October-December. A consumer or a bidder will have the option of bidding minimum for any one quarter or up to all four quarters in a forward eAuction year.

Source: Platt's news. The copyright of the article is with McGraw Hill, Inc.