Coal news and updates

NTPC awards coal import tenders worth Rs 8,308 crore to Adani Enterprises

India’s largest power generating company (genco) NTPC has awarded multiple contracts to import 6.25 million tonne (mt) of coal to Adani Enterprises at a cumulative value of Rs 8,308 crore.

The state-owned genco is importing coal to meet the recent directive of the Union power ministry to blend 10 per cent imported coal in order to tackle domestic coal shortage.

The company placed six different tenders and received technical bids from four players — Ahmedabad-based Adi Tradelink, Chennai-based Chettinad Logistics, and Delhi-based Mohit Minerals, along with Adani Enterprises.

In March, when the coal crisis erupted, NTPC had issued five tenders for importing 5.75 mt of coal, and all the contracts went to Adani Enterprises. The cumulative amount of these tenders was Rs 8,422 crore. The technical level bidders were the same one as in the latest round.

Company executives had earlier said the imported coal would come from Indonesia and that NTPC is not looking to import from Australia. Adani owns and operates Carmichael coal mine in Australia with a capacity of 10 mt per annum.

NTPC is in the process of placing orders for close to 20 mt of imported coal to meet the government-stipulated blending target of 10 per cent.

A senior company executive said 2.5 mt of imported coal arrived at NTPC plants and 1.6 mt was at the ports. “The company has placed an order for 10 mt and would soon go for the board’s approval for placing an order for another 5 mt,” said the person.

Business Standard recently reported that NTPC would see its fuel cost go up to Rs 7-8 per unit from importing coal as against Rs 2 per unit from buying domestic coal from Coal India (CIL). Senior officials said this would increase the final electricity tariff of NTPC by 50-70 paisa which would be passed on to the consumers.

Coal price in the global market is currently 5 times of the CIL-notified coal prices. The imported coal would be used in several stations of NTPC, even the ones closer to a coal mine such as Talcher, Farakka, and Kahalgaon.

Acknowledging that domestic coal stock is not enough to meet the power demand in the country, the Centre two weeks back directed all states and power generating companies to import coal before monsoon sets in. The coal ministry, however, has maintained that there is enough stock in the country and the should stock up in advance.