Increased availability of domestic coal and lack of buying interest has put Coal India’s import plans on hold.

In June 2012, CIL prepared a road map to import 18-20 million tonnes, to fulfil its supply commitments to power generation sector, in the last fiscal.

The company was agreement-bound to mitigate a minimum of 80 per cent fuel requirement of nearly 60,000 MW of generation capacities scheduled to be added between April 2009 and March 2015.

Due to an estimated short-supply of domestic coal, it was decided that 65 per cent of the requirement will be met through CIL’s own production, and the rest 15 per cent will be sourced from overseas markets on cost plus basis.

A year later, the entire exercise appears to have lost its purpose.

Adequate domestic coal

A slower growth in demand compared to initial estimates, and 7.4 per cent rise in supplies (off-take), helped CIL to fulfil its supply commitments (80 per cent for new stations and 90 per cent for older station set up before April 2009), without resorting to imports, in the last fiscal.

And, as in May 2013, when demand for electricity is at its peak, the miner is flooded with requests to slow down despatches.

There is no immediate plan to import either.

“Some consumers expressed initial interest to import 5.6 mt through CIL in the last fiscal. However, they are yet to submit any firm commitment, without which imports cannot be executed,” a company official told Business Line .

According to him, though CIL has exceeded its targets in supplying coal to the electricity generation sector as a whole, approximately 10-12 new consumers (post April 2009) received less than the promised 80 per cent supplies, due to logistics issues.

“Ideally, CIL should supply the balance quantities through imports. However, we are yet to see any consumer interest in this regard,” he said.

The reasons are apparent. CIL never imported coal in its history and, has little ability to do so either. Naturally, the miner will bank on any State-owned trading agency to execute the order, adding on to the cost of imported coal.

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