NEW DELHI: State miner, Coal India Ltd (CIL) is in advanced stage of discussion with Bangladesh for export of coal, which if firmed up will help easing out of more than 80 million tonnes of coal lying at various pitheads and power projects in India.
The Indian Government has taken up the issue at the secretary level and a decision is expected soon.
“We are already into it and they (CIL) are in very deep consultations with Bangladesh for exporting it,” Anil Swarup, Coal Secretary said at an event held Tuesday.
The discussions are critical since, exports to Bangladesh would also help CIL in increasing sales. According to a deal signed in July 2016 between the two countries, construction of a 1,320 mw coal fired power plant, the biggest project under bilateral cooperation is underway.
Commenting on the drop in offtake and volumes, Swarup said as of March 31, there was an inventory of over 80 MT of the fuel both at the pitheads and power plants. It would have been difficult to stock the coal.
With the entire production of coal at around 500 MT and with another 80 MT of stocks, the firm would have had to look the issue and that is why CIL did not produce more, he said, adding that the second reason why CIL did not produce more was because there unseasonal rains in August, which impacted mining.
“I don’t think it is an issue as they (CIL) will catch up as there is exposed coal available and can meet the requirements,” Swarup added.
The Ministry is bullish about achieving the coal production target of one billion tonnes and Swarup said any revision of this will be decided after three years. “The government has not scrapped this target,” he said. It has also set a production target of 598 MT for CIL for 2016-17 and aims to achieve one billion tonnes by 2020.
“We plan for the future. Our power plants are working at a plant load factor (PLF) of 62 per cent, but in the future we believe this PLF will go to 70 per cent and that is the time when we will have more demand. Additional capacity will be added,” Swarup said.
With UDAY taking off, Swarup is also confident that the financial position of state discoms will improve, giving an impetus to coal demand.
“We believe that the government measures focused on power T&D capex and UDAY-driven SEB revival, will improve SEB purchasing power and lower power cuts; thus, in the long term, power demand growth is likely to improve. This will flow through on higher coal demand, sustaining CIL’s growth,” according to a research report by JM Financial Institutional Securities Limited.