NTPC floats bids for 5Mt coal imports

By: Ajoy K Das
11th April 2012
Updated 35 minutes ago
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KOLKATA (miningweekly.com) - India’s largest thermal power producer, NTPC Limited has invited bids for import of five-million tons of coal for fuelling its 13 plants across the country.

Bid documents will be issued until April 25, and coal imports would be through international competitive bidding for several supply packages.

The power producer imported 16-million tons of thermal grade coal during 2011/12, while its total coal consumption during the current year has been projected at 160-million tons.

Projections of total coal imports during the current year had not yet been firmed up but given the coal shortage in the country and Coal India Limited’s (CIL's) limitations in increasing production, NTPC’s reliance on imported coal would increase compared to previous year, officials said.

NTPC has an installed capacity of 37 000 MW from its 15 coal-based power plants, seven gas-based plants and five other gas and coal generating plants, which the company operates through joint ventures. NTPC currently has 17 000 MW of new coal-based capacity at various stages of construction.

The increased requirement of coal for existing plants and new capacity under construction meant domestic coal supply, primarily from CIL, would fall far short of the 160-million tons forecast for the current year. CIL, with a stagnating production of 435-million tons during 2011/12, was not expected to supply more than 120-million tons to NTPC during the current year.

Since last year, NTPC has been working on concluding long-term supply agreements with coal mines in South Africa, starting from four-million tons a year and ramping up to 16-million tons a year over a period of time. However, company officials refused to comment on progress made in finalising any long-term agreements with coal-asset owners in South Africa.

The move toward long-term agreements with suppliers was initiated after NTPC pulled out of the race for Bandanna Energy's coal mines over issues of valuation.

However, NTPC suffered from collateral hits in the form of higher generating costs as a result of its reliance on imported coal. Currently the power producer blends 40% imported coal with domestic fuel though its boilers, which were designed for 155 blending which increases the viable cost of generation four times.

Meanwhile, NTPC has received environmental clearance from the Forest and Environment Ministry for its seven-million-ton-a-year Dulanga opencast coal-mining project in Ib Valley, in Orissa. The reserve had been allocated to the power producer for its 1 600 MW thermal power project in the region.