CIL's import initiative hits a damp patch

KOLKATA: Coal India's efforts to source coal at a discount from overseas producers and supply it to Indian consumers, including state-run utilities, have come a cropper. The coal major has not been able to find any taker abroad for its offer of a long-term contract at discounted prices.

CIL is also not amenable to supplying coal at the doorsteps of its customers as demanded by power producer NTPC, which is keen to reduce transport costs. This has led NTPC to shelve plans of sourcing about 4 mt of coal a year from Coal India. NTPC chairman Arup Roy Choudhury said both price and the supply points remained sticking points in the deal. "We would not buy coal if it is offered to us at a price higher than what we are presently importing," he said, adding that its existing importers were supplying coal to its thermal plants. He pointed out that the company did not have the infrastructure to transport coal from the ports, where CIL said it would supply the fuel, to its thermal plants.

CIL had invited expression of interest from overseas coal producers to enter into long-term import contracts at a discount over international prices. It received bids from 11 firms, including Rio Tinto, Xstrata, Peabody, Massey Energy and Sinar Mas. But no overseas supplier agreed to sell coal at a discount.