Public Sector

India’s CIL launches coal import substitution drive

India’s CIL launches coal import substitution drive
Coal workers digging for coal in a seventy feet deep rathole mine in the Jaintia Hills in Meghalaya. Express Photo by Tashi Tobgyal New Delhi 281012

India’s CIL launches coal import substitution drive

India’s CIL launches coal import substitution drive – State-controlled producer Coal India (CIL) has launched a drive to eliminate thermal coal imports for blending purposes by March 2021. CIL, which is estimated to possess currently have record coal inventories of around 78mn Tons, is reaching bent generation companies and requesting them to submit their requirements for the 2020-21 financial year that ends on 31 March.

Power plants willing to think about domestic coal to substitute imports need to respond with their preferred coal grade, coal producer, source, and mode of delivery. A plant choosing domestic coal is going to be required to offer an undertaking that it’ll curtail or stop imports within the current financial year.

Utilities choosing domestic coal over imports will get to sign a memorandum of understanding with its preferred CIL subsidiary. CIL has also launched a standalone portal on coal import substitution. Interested power plants can share details of coal imported in 2019-20 alongside the source country. The portal lists seven countries from which imported coal would get replaced by domestic supply including Australia, China, Indonesia, Russia, South Africa, Thailand, and therefore the US.

CIL’s latest move follows an advisory last month from the facility ministry to public and personal sector utilities asking them to scale back their use of imported coal for blending purposes.

Indian power plants designed to run on domestic coal imported 23.8mn tons of coal for blending in 2019-20, up from 21.4mn tons within the previous year, consistent with India’s Central Electricity Authority.

The Indian coal ministry has also been pushing states to discourage their utilities from importing coal and to use domestic supplies.

The government’s drive to chop down on imports coincides with a decline in power offtake amid a nationwide lockdown that began on 25 March. There have since been relaxations to the lockdown but its reduced power demand from commercial users. The lockdown is in situ until 31 May. Supplies from CIL to the country’s power sector declined for a second straight month in April by 22pc to 32mn tons amid a build-up of stocks at utilities and lower electricity generation. Power stations across the country have inventories of on the brink of 51mn tons, equating to 30 days of coal burn.

The government has also started performing on a serious expansion in coal transportation infrastructure and plans to spend 500bn rupees ($6.6bn). this is often aimed toward connecting coal mines to buyers across remote locations, especially coastal utilities as per the government drive may find some takers among plants that are landlocked, said an executive with a coastal utility.

The Indian government on 20 can also approve the auction of fifty coal blocks for commercial mining on a revenue-sharing basis to widen industry participation within the sector that’s currently dominated by CIL.

Read more Public Sector News on India Frontline.