Coal India on Tuesday said that it has increased the duration of its fuel supply agreement with users in the non regulated sectors to 10 years from five as it seeks ensure long-term supplies through the linkage auction route.

The non-regulated sector consumers include steel, sponge iron, cement and captive power plants.

In order to meet short-term requirements, the public sector miner is stepping up sales through e-auctions in the fourth quarter.

Coal India offered 64 million tonnes (mt) for auction between April and December, of which 56.7mt got booked, including 17.4mt by South Eastern Coalfields and 15.3mt through Mahanadi Coalfields.

“With increased availability of coal in the last quarter of the fiscal, offer of coal is likely to increase further under the e-auction window. CIL is aiming to put 20 per cent of the envisaged production of this fiscal’s fourth quarter under e-auction block,” the public sector miner said in a statement.

Coal India’s total production during the first three quarters of the ongoing fiscal period was 531.9mt. It has a production target of 780mt for the entire financial year.

Higher sales through e-auction will also have a positive impact on earnings. Analysts estimate a revival in demand and a rise in international prices have pushed the premium to a level of 80-100 per cent over the last few months.

Coal India has also seen an encouraging response in the sixth tranche of the linkage auctions. Of the total quantity of 11.05mt offered to the sponge iron industry, the booked quantity was 10.99mt. The seventh tranche of the auction has already commenced in December.

“CIL is committed to supply coal to the extent of the normative requirement of all industrial sectors including sponge iron. In this endeavour, regular linkage auctions, as per the government’s approved policy, are being conducted for long term coal linkages”, said a senior official of CIL.

Out of the total successful booking of 7.64 mt in Coal India subsidiary — South Eastern Coalfields — by the sponge iron units, 51 per cent was converted to fuel supply agreements. In Mahanadi Coalfields, 1.44mt got converted into FSAs out of the total booked quantity of 1.83mt.