Coal news and updates

Govt. may stop taking new applications for LoAs from cement & sponge Cos.

January 21: After having taken a decision in May 2013 to keep in abeyance taking fresh applications from power sector companies for grant of Letters of Assurance (LoA) for coal supplies till next two years, the ministry of coal is considering to take similar decision for sponge iron and cement sector companies.

An indication to this effect was visible in the last meeting of Standing Linkage Committee (Long Term) for power, cement and sponge iron held on December 20, 2013 when a proposal was moved to stop receipt of fresh applications from cement and sponge iron companies.

Any decision on the proposal was deferred till next meeting as the members from cement and sponge iron sectors present in the meeting opined that it was not clear about the quantities of coal that would be available for cement and sponge iron sectors and as to when the fresh linkages would be considered.

However, the Chairman of the meeting said a final decision on the proposal will be taken in the next SLC (LT), the date of which is yet to be announced.

An agenda in the meeting held on December 20, 2013 read, "As the supply position is not likely to improve in the near future, it is proposed that a similar decision as taken for the power sector by SLC (LT) for power on May 31, 2013 may be taken for cement and sponge iron sectors also, so that the receipt of fresh applications may be stopped."

So far as pending applications are concerned - 391 from sponge iron sector and 164 from cement sector - it was recommended that the fees deposited by them be deposited to government account, but the processing of these applications should be kept in abeyance in view of negative coal balance reported by subsidiaries of Coal India Ltd.