CIL floats medium-term tenders to import 6 million tonnes of coal

In a bid to shore up coal stocks at the indigenous power plants, as directed by the government, Coal India Ltd (CIL) on Friday floated two more international competitive bidding e-tenders of 3 million tonnes each for imports.

The State-owned miner had floated an e-tender to import 2.416 mt on Wednesday. This was based on indents received from seven State Gencos and 19 independent power plants (IPPs) and was for a limited period and limited quantity. The government had recently directed CIL to be prepared to import 12 mt of coal for power utilities for the next 13 months up to July 2023.

These two medium term tenders for 6 mt have an option of increasing the bid quantity by 100 per cent to 12 mt, the company said. The tenders are not indent based but to keep coal on tap for immediate availability and use in future. It is an advance action by the company in fortifying future supplies and keeping a vendor ready.

“As and when indented by the state gencos and IPPs orders will be placed to ship the coal into the country. From the date of placing the indents delivery of coal would be made within 30 days at the free on rail destination of the power plants which seek coal. This means delivery at the doorstep,” the release said.

Tenure for placement order

The tenure for placement of order is for a period of one year beginning July of the ongoing fiscal year till June 2023. The minimum indent quantity will be 50,000 tonnes. The last date for submission and opening and the bids received is July 5.

“With little or no experience in coal imports, CIL has floated two back to back international competitive bids, as assigned by the government, in a record time adhering to the timeline set,” it said.

The bids are for 5,000 GAR (gross as received) quality of thermal grade coal.

For the 6 mt coal sought through competitive bids, nine destination ports have been identified for the discharge of coal, 3 mt each at the eastern and western coasts of the country. The estimated value of the work is pegged at ₹3,850 crore for each tranche of 3mt.

Ramping up production

CIL, which has been steadily taking measures to ramp up production, posted a 30 per cent output growth in May 2022 with a volume growth of 12.6 mt. The company produced 54.7 mt of coal during the month compared to 42.1 mt same period last year.

The company produced24.2 mt more coal during the first two months of the current fiscal than what it did in the same period a year ago. CIL’s production increased to 108.2 mt, till May of the current financial year, against 84 mt same period last year representing a growth of around 29 per cent.

The company has set a production target of 700 mt  during the current fiscal, which would entail a growth of around 12 per cent over last year.

“Though CIL is on its full steam in scaling up the production to meet the domestic demand of the country, this is a step towards a state of readiness to combat futuristic coal supply crunch if any,” the release said.