Coal India ties up with 17 power plants to substitute imports

By: |
March 3, 2021 1:20 AM

India’s coal imports dropped 29.7% to 48.84 MT in April -June this fiscal and as of February 28, CIL could push additional 71 MT with e-auction booking increasing by 43.5 MT during April-February this fiscal.

This helped the consumers opting additional quantities of coal at lower cost from CIL.This helped the consumers opting additional quantities of coal at lower cost from CIL.

State-owned miner Coal India ( CIL) has tied up with 17 power plants to drive import substitution, besides other measures that have helped it to push 71 million tonne of additional coal to consumers ending February this fiscal. This would help ease pressure on the government’s current account with dropping coal imports. All the 17 power plants have linkage existing with the miner.

India’s coal imports dropped 29.7% to 48.84 MT in April -June this fiscal and as of February 28, CIL could push additional 71 MT with e-auction booking increasing by 43.5 MT during April-February this fiscal.

Besides inking pact with 17 power plants for taking indigenous coal replacing imported coal, the company offered additional coal to the non-regulated sectors against fuel supply agreements of up to 100% of annual contracted quantity (ACQ). Trigger level for power sector was increased from 75-80% and ACQ for power plants was enhanced to 100% of normative requirement from 90%. Additional coal was allocated to state and central generating companies under flexi utilisation policy, enabling them to reduce coal imports.

The company waived off performance incentive to the consumers of power sector, for supply of coal beyond the trigger level since the beginning of the fiscal. This helped the consumers opting additional quantities of coal at lower cost from CIL.

“These coordinated efforts besides 43.5 MT of increased bookings in e-auction, helped arrest the imports by further 28 MT,” a senior executive of the company said, adding if CIL had not taken such measures, the consumers would have imported the same amount of coal. Small consumers and traders who did not have long-term contracts with CIL opted for e-auction sales.

Power sector consumers, among the many, who were provided coal under these measures were CESC, Andhra Pradesh Power Development Corporation, Adani Power and GMR group. Non-regulated sector consumers include Vedanta, Jindal Steel & Power, NALCO, Hindalco Industries and Tata Steel BSL.

Bookings under special forward auction meant exclusively for power sector consumers at 33 MT during April-February 2021 logged 27% growth over last year’s same period. The increase in real terms was 7 MT against 26 MT last year.

Imports by domestic coal-based power plants at 9 MT declined by 55% till January 21 compared to 20 MT during the same period last fiscal.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1LIC listing seen challenging in FY22 too
2Google For Startups: Helping greenhorn ventures bloom
3Amazfit Bip U Pro: A smartwatch in a sweet spot