The government has increased the tenure of the coal supply by up to 30 years under the coal connection given to the auction for the non-regulated sector (NRS) such as steel.
Development is taking place at a time when Coal India Ltd (CIL), which accounts for more than 80% of domestic fuel output, is linked to the non-regulated domestic coal sector, which is abundantly available in the country.
“The government has now approved revised tenure for the coking coal linkage in the non regulated sector linkage auction. It has been approved that the coking coal linkage in the non regulated sector linkage auction may be granted for a tenure up to 30 years,” the coal ministry said in a letter to CIL on Monday.
Laying down the guidelines for auction of coal linkages of non-regulated sector, the policy provided that “the tenure of new Fuel Supply Agreements (FSAs) may be as decided by the Ministry of Coal subject to a maximum of 15 years”, the ministry said.
As a result, the policy for auctioning non-regulated sector ties has been updated, the Ministry said, asking CIL to take further action accordingly. On the one hand, the country has a surplus of domestic coal, while on the other, there is a decline in demand for dry fuel. In order to boost demand for coal, the government has announced a series of measures, such as increased supply for connecting consumers.
Several relief measures have also been declared for users of CIL, including the power sector. Previously, Coal Minister Pralhad Joshi had written to state chief ministers asking them not to import dry fuel and take domestic supplies from CIL. The Center also asked the generators, including NTPC, Tata Power and Reliance Power, to reduce the import of dry fuel for blending purposes and to replace it with domestic coal.
