The Centre would allow Coal India Ltd (CIL) to charge higher for washed coal even as it has been making every effort to keep coal prices down, according to Santosh Bagrodia, Union minister of state for coal.
Bagrodia said though CIL was sitting on a huge surplus of Rs 20,600 crore, it could not afford to subsidise the cost of benefication. ?We want that 100% of the coal produced is washed and consumers pay a higher price for it,? Bagrodia said.
CIL, which is bogged down by the government initiative to over supply coal to the market to keep prices down, has heaved a sigh of relief following Bagrodia?s announcement.
The coal ministry has also prevented CIL from charging a premium in its June e?auction, and has brought down the reserve price to 5% of the floor price as against 82% premium it got in the April e-auction.
CIL officials said they were actually worried about returns on investment as the government?s current policy was bringing about a check in its profit-making.
CIL, in the first phase, will set up 28 washeries with a total capacity of 98 million tonne (every time it washes). This will entail investment of Rs 1,500 crore.
CIL aims to increase the capacity of washeries to 180 mt by the end of the 11th Plan period, officials said.
CIL chairman Partha S Bhattacharyya said tenders for the washeries would be floated shortly. Consumers would get consistency in the quality of coal and better heat value by paying a higher price for washed coal, he added.
CIL is pitching for pricing washed coal on the basis of gross calorific value (GCV), a system followed world wide, replacing the current system of useful heat value (UHV), officials said. CIL had earlier wanted that the GCV be brought in place of the UHV, but was unsuccessful owing to opposition from the power sector.