Coal news and updates

Cement cos resent SCCL’s decision to stop credit facility for rail despatch

April 10: The cement companies having linkage with Singareni Collieries Company Ltd (SCCL) have resented the withdrawal of credit facility given to them for availing railway rakes for coal despatch.

In a letter to SCCL, the Cement Manufacturers’ Association (CMA) said, “The abrupt change in the condition of payment…will further add to the financial constraints of our member companies drawing their coal supplies from SCCL sources, when the cement industry is already reeling under the burden of idle capacity and increasing input costs.”

Earlier, SCCL used to give credit facility against a Bank Guarantee amounting to the coal value (together with taxes and duties) for one rake (3,800 tons) only. The actual payment was to be deposited within three days from the date of moving of rakes from SCCL’s despatch point.

However, SCCL has made changes in the clauses governing the Fuel Supply Agreement (FSA) with effect from April 1, 2014, thereby withdrawing the credit facility so far enjoyed by the buyers.