Coal news and updates

CIL against reverting to original supplies to block holders

March 6: Coal India Ltd (CIL) has said that it would be difficult for it to revert to the quantum of original supplies pledged via coal linkages to end-use plants (EUPs) which could not develop their captive coal blocks as per schedule.

The supply of coal to EUPs is progressively reduced as per a set tenure if the production from a captive block did not start as per schedule. It has been found that in many cases production from captive coal blocks could not be started due to various reasons, including delay in getting statutory clearances.

Because of delay in starting production from captive blocks, the EUPs on one hand were not getting assured coal from their own blocks and on another their coal supplies from CIL was being progressively reduced.

Faced with such a situation, EUPs had approached the ministry to extend the supply of coal as per initial linkages stating that they were not responsible for delay in starting production from their captive blocks.

CIL has already communicated this to the Inter-Ministerial Committee (IMC) set up by Ministry of Coal. The IMC, in turn, in a meeting in February, has recommended that supplies to these EUPs may be assured after taking inputs from the Central Electricity Authority and CIL.

The Ministry of Coal (MoC) had decided to take the opinion of the Ministry of Law on the matter.

The Ministry of Law has said that coal blocks had been allocated to some EUPs and these had been given tapering linkages as a stop-gap measure for smooth running of the plants.

However, certain blocks got de-allocated for non-development within the prescribed time limits. "When these coal blocks have been de-allocated, the purpose/basis for providing tapering linkage has been frustrated."

As such, if tapering is allowed, it may affect the merit of the pending cases. Since those EUPs which are operational will require supply of coal for their continued operation; As such they may be provided normal linkage subject to extant policy of the administrative ministry," the law ministry advised.

However, CIL seemed averse to the idea, saying it had already made substantial commitment to the power sector and all its subsidiaries were running negative balance of coal supplies.