Coal India has tied up with Andhra Pradesh Generation Company (APGenco) for substituting imported fuel, used for blending purposes, by high quality Ranigunj coal. The initiative is part of the CIL’s effort to market Ranigunj coal that has few takers.

APGenco procures 5 million tonnes low quality (4100 kilo calorie) fuel from CIL subsidiary, Mahanadi Coalfields in Odisha for its super-critical 2X800 MW power station at Krishnapatnam. The additional fuel requirement is met through imports.

As per the new plan, it will procure an additional 1 mt fuel of high energy value (6100 kcal) and low ash Ranigunj coal produced by another CIL arm, Eastern Coalfields, replacing the import demand. The State-owned miner has already entered into such arrangements with NTPC and Maharashtra Generation Company (Mahagenco). According to CIL sources, the deal is a win-win to the generation companies as they get the desired fuel at lower than import price.

Decline in sales

After nearly two decades, CIL witnessed a decline in coal sales in the first half of this fiscal. According to the company, sales were down 0.9 per cent compared to last year in April-September. Production, however, is flat indicating piling up of pit-head inventory.

Coal sales were particularly under pressure over the last two months due to arrival of increased quantities of cheap hydro-electricity and distress sale of thermal power by stressed imported coal-based private sector generators, especially in Andhra Pradesh. The situation hasn’t change much in October as hydro-electricity supply is up by 35 per cent in the first week, compared to the same period last year.

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