The Union Ministry of Coal will come out with a linkage auction policy next month for power companies, which did not have such arrangements with Coal India Ltd.

Anil Swarup, Coal Secretary, told this to reporters at the Asian Mining Congress.

"We have already come out with a linkage policy for non-power companies. Now in the next one month, we will come out with a policy for power companies, which do not have coal linkages," Swarup said.

He said that the current surplus stock with CIL was a temporary phenomenon.

Explaining the ways to handle this phenomena, he said several steps, including reduction in import of thermal coal, improved fuel supply levels, better evacuation of pit head coal stock and restructuring of debt for power distribution companies had been initiated.

The Coal Secretary hoped that in the next six months a large number of State distribution companies would come under the UDAY scheme for restructuring of their debts and unleash demand for coal. So far, seven State power distribution companies have opted for UDAY.

"Once the financial position of Discoms improve after the implementation of UDAY, they will draw more power which in turn will lead to higher demand of coal," he said.

Coal India is faced with a pit-head stock of in excess of around 40 million tonnes (as on February 15).

"We are trying to supply more coal to power companies and trying to ensure that import demand from the companies in the hinterland is replaced with domestic supplies," he added.

India's coal import has already gone down by 16 per cent in the April-January period, which has resulted in Rs 20,200 crore savings for the government, he said.

"Due to lower coal import, we are going to save Rs 25,000-30,000 crore this year (2015-16)," he said.

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