India orders thermal power plants to stop coal imports

KOLKATA (miningweekly.com) – Concerned over mounting stocks at Coal India Limited (CIL) and falling offtake by large consumers, the Coal Ministry has directed government-owned and -operated thermal power producers to stop all coal imports and instead source feedstock from the domestic miner.

“We have sufficient coal but there are no takers for it. We have asked all provinces which are currently importing coal to immediately stop the imports,” said Coal Secretary Vikas Swarup.

He said that the government had put in place an effective process of auctioning coal for private companies and eight-million tons a month would be offered to the power sector.

“As for federal and provincial government-owned power generation companies’ concerns, we are open for discussions and they just have to give a number and we will provide that volume of coal to them,” Swarup said, adding that there was no shortage of the dry fuel in India.

He pointed out that power generation companies had to clear outstanding payments to CIL, saying that in last financial year, these companies’ uncleared dues amounted to $179-million.

Significantly, in a more drastic step to reduce coal imports, the Indian government has scrapped plans for the construction of at least four large thermal power plants categorised as ultra-mega thermal power plants with aggregate generating capacity of 16 GW.

The four proposed plants to be located in the provinces of Chhattisgarh, Karnataka, Maharashtra and Odisha would together have required 46-million tons a year of coal, half of which would have been sourced through imports.

Government officials said that the scrapping of the projects was in line with the Coal Ministry target of eliminating coal imports within the next two to three years.

Government data released this month showed that coal imports during May 2016 were 16.38-million tons, down 19% over the corresponding month of previous year.