Coal consumers, other than those in the power sector who did not purchase their full quota in the quarter to June, may increase the remaining quantity if it is available, provided that they agree not to import similar quantities during the year, said Western Coalfields, a subsidiary of Coal India.
The Indian Captive Power Producers Association called the notice and said it was “strange.”
According to the note, the decision was taken at the recent meeting of Coal India’s functional directors for non-power consumers holding legitimate supply agreements with coal companies.
“Under this arrangement, the monthly contracted quantities that could not be availed by the fuel-supply agreement (FSA) consumers in previous months due to lockdown or other difficulties, could be availed by the consumers during the subsequent months but within the year 2020-21, subject to availability of coal at the contracted sources,” Coal India said in response to ET’s query. “The objective is to deter consumers from imports due to non-accessibility of domestic coal.”
However, Rajiv Agrawal, secretary general of the Indian Captive Power Producers Association, said: “Consumers opting to revive the lapsed quantity will have to buy Coal India’s coal in subsequent months even if imports turn out to be cheaper. It would be strange that consumers will not be allowed to import even if Coal India is not able to supply this quantity – since the circular says the quantity will be made available subject to availability at coal companies.”
According to Coal India, most non-power plants import coal from different countries for blending or direct use. The need has emerged for domestic coal consumption instead of imported coal to save foreign exchange, as ample domestic coal is available to Coal India , the company said in a recent circular.
Coal India ‘s stocks are at an all-time high of 75 million tonnes, while power plant stocks have reached 44 million tonnes.
Coal India is in talks with sponge iron, cement and captive power plants to provide alternative fuel to imports. The state-run miner, along with the Ministry of Coal, has agreed to reduce imports for the purpose of blending to zero this year. The aim is to connect consumers in order to replace long-term import requirements with memoranda of understanding.
