Coal news and updates

WCL likely to reconsider cost-plus mines approach

September 11: It seems the stance of the non-power coal consumers could bear fruit because, sources informed ICMW that the senior management at Western Coalfields Limited (WCL) has agreed to consider the request of the non-power industries to safeguard the interests of the industries concerned by not allocating coal from the cost-plus mines.

Many non-power consumers have not received their quota for August and have been forced to procure coal from the market to meet their daily consumption needs.

ICMW had reported on September 10 that recently WCL had, in a release dated August 14, 2013, said that the functional directors of the CIL arm had decided, at a meeting held on July 10, 2013 that "besides distribution of higher grade coal as directed by … the CIL board, coal from cost-plus mines, wherever available, shall be offered, first with pro-rata distribution from highest price to lowest price."

This clause was incorporated in addendum to the FSA against August 13 coal quotas, sources said.

"WCL had said that 100% of the coal supplied would be from the cost-plus mines. However, nowhere in the FSAs was the percentage of quantity allotment mentioned. No CIL directive mentions the cost-plus approach," sources said.

Sources further said coal allotted from the cost-plus mines would have been of lower grade and not feasible for consumption since the quality available would have been of G-9 variety with an average gross calorific value of 3,500 k/cal whereas the user industries require coal with a GCV of (+) 4,500 k/cal.