Coal India invites power companies to lift coal from pit heads

13 JUN, 2012, DEBJOY SENGUPTA, ET BUREAU
KOLKATA: Coal India has invited power producers and utilities, including independent power producers to lift coal directly from their mines. This is over and above the volume that the company will supply to power companies.

In a notice to power companies, Coal India has said that an one-time offer is being made to all power utilities drawing coal under fuel supply agreements during 2012-13 to lift coal which is held in stocks on "as is where is" basis with the stipulation that the power stations will make their own evacuation arrangements.

"This will serve the objective of honoring the FSA up-to trigger point with normal dispatches and dispatches and to even exceed it by allowing liquidation from the stocks wherever the power utilities would be as per the FSA, including incentives as applicable.

Depending on the success of this scheme, in the near future, the company plans to allow captive power plants to lift coal from our pit heads and may also remove the restriction of limiting supplies from specific mines for all power companies. At present all consumers are linked to specific mines when supply agreements are signed. This may be removed if they lift their own coal.

Coal India subsidiaries have been asked to supply coal directly from pit heads to independent power producing companies that supply to power utilities or the power utilities themselves. CIL officials have also started shooting letters to power producers to start lifting coal from the pitheads. This is for the first time that Coal India is taking such a move and it has also requested the railways to offer sidings for the coal that they will lift from the mines.

The move is expected to make increased coal available for power generators and will also enable us to liquidate some of our stocks.