Date | Nov 04, 2016:

Come April, the Centre would stop importing coal for state-run power producers. It has also put on hold the plan to award blocks to the private sector.

With the abundance of coal and little demand, the government has decided not to import any coal for any state-run power PSUs (public sector undertakings) after the current contracts expire.

Poor demand has also made government go back on its earlier decision to award blocks to the private sector for commercial mining, coal secretary Anil Swarup said.

"We have done a very detailed analysis of how to handle imports and strategies related to power and non-power sector. In power sector, we have engaged with each of the PSUs. By 31st March, imports by PSU power utilities would be zero. There will no imports thereafter," Swarup said while addressing members of MCC Chamber of Commerce.

Public sector power producers imported 35-40 million tonne coal.
"By end of this year, we will reduce imports by 15 million tonne.
There is unit-by-unit strategy to cut imports," the secretary said.

The ministry is also looking at how to encourage private sector including industries like steel to replace better quality imports by poor quality domestic coal.

"In power, there are boilers suited for imported coal. We are exploring how to mix domestic coal with imports for such plants. Similarly, we are trying to do it for deregulated sectors. We have engaged with SAIL, RINL and others on how to provide the coal they are importing."

While the PSUs are being told not to import, for the private sector, the availability of coal is being increased through auctions.

"With international prices firming up, there is a chance that this coal would get picked up. We are assuring the supply of coal for private sector, while earlier there was only spot auction, now there is availability throughout the year."

Apart from curbing imports, another fallout of excess coal availability is the disinterest in promoting commercial mining by private sector.

"The ground work (for commercial mining) has been done but because of good work being done by Coal India, there is not much demand for mines as there were hardly any demand in the fourth round of auction," Swarup said when asked about prospects of commercial mining.

Earlier this year, the government opened up commercial mining in India by allocating 16 mines with an estimated annual capacity of 40 million tonne to various states.

According to a recent report by BMI Research, an arm of global rating agency Fitch, India may continue to suffer from deficit in coal requirement due to delays in opening up of commercial mining to private sectors and slow approvals for new state miners.

(Source: http://www.dnaindia.com/)