Coal India’s (CIL’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.
The coal major 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 million tonnes 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, and Coal India said it would supply the fuel to its thermal plants.
At a time when prices of the dry fuel have been spiralling, Coal India had invited expression of interest from overseas coal producers and traders to enter into long-term import contracts at a discount over international prices. It received bids from 11 coal companies, including Rio Tinto, Xstrata, Peabody, Massey Energy and Sinar Mas. But no overseas supplier agreed to sell coal at a discount. “On the basis of bids received from interested parties and the economies of transport logistics, the price at which we would be able to offer the coal to Indian consumers would not be at a discount. Hence we are going slow on the import initiative,” a senior Coal India official said on condition of anonymity.
The coal major 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 million tonnes 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, and Coal India said it would supply the fuel to its thermal plants.
At a time when prices of the dry fuel have been spiralling, Coal India had invited expression of interest from overseas coal producers and traders to enter into long-term import contracts at a discount over international prices. It received bids from 11 coal companies, including Rio Tinto, Xstrata, Peabody, Massey Energy and Sinar Mas. But no overseas supplier agreed to sell coal at a discount. “On the basis of bids received from interested parties and the economies of transport logistics, the price at which we would be able to offer the coal to Indian consumers would not be at a discount. Hence we are going slow on the import initiative,” a senior Coal India official said on condition of anonymity.
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