The country?s single largest coal producer, Coal India (CIL), has asked the government to do away with a provision under New Coal Distribution Policy that allows it to import the raw material on behalf of domestic customers and sell it to them.
According to a company official, this was because the coal producer could not find any consumer ready to buy it at the price being offered by CIL. ?Importing coal means higher prices. Once we import, we have to sell it at minimum profits. With our discussions with officials of some power and steel companies, none of them agreed to pay more than the import price,? the official said on the condition of anonymity.
New Coal Distribution Policy makes it mandatory for CIL to meet up to 50% requirement of coal for domestic consumers. When the policy was announced in 2007, CIL had agreed to the provision of import thinking that it would be easier to meet the production shortfall.
However, as per current norms, coal has open general licensing system. Which means, any company be it steel, power or cement can import the raw material as per their requirement. Since there is a shortage of coal production in the country, most of the private firms and PSUs including Tatas, NTPC, meet their requirements through import. None of the companies would want to shell out more to buy it from CIL.
CIL has already taken up the matter with coal ministry, which supports its demand. The coal ministry has conveyed planning commission that since the core competency of CIL is production not trading, it should stay away from selling imported coal.
?The coal can not be imported in bulk and stored. It needs to be fixed with individual end users based on the requirement of quality and quantity of coal. Since, CIL has found no buyer, it is better not to have such provision,? a ministry official said.
The coal requirement in the country is going to go up significantly. The total demand of coal during the 12 th five year plan is estimated to be 980.50 million tonne as against expected production of 683 mt.
