The world’s largest coal producer, Coal India Ltd (CIL), is in a spot of bother. In order to meet the directive from the Prime Minister’s Office to ensure supply for 20 years to power plants of 50,000 mega watt (Mw) that would be commissioned by March 2015, the firm has to produce an additional 220 million tonnes (MT) of coal by then — considering the fact that it is shying away from imports. According to experts, this is close to impossible for a firm reeling from environment hurdles.
“In 2009-10, we had supplied 298 MT to the power sector. In 2010-11, it increased to 304 MT and this financial year we expect to supply 310 MT, though our target was 347 MT. During the financial year 2012-13, we are keeping the same target and is anticipated to meet it. However, if we have to supply an additional 50,000 Mw, we need another 220 MT of coal,” said H K Vaidya, chief general manager (sales and marketing), CIL. According to experts, 4.4 MT of coal is needed for every 1,000 Mw of power generated.
This comes a week after the firm’s acting chairman and managing director Zohra Chatterji said the firm is not in the business of imports. Besides, its effort to strike a long-term offtake deal did not work out as it failed to find any back-to-back takers in India. CIL’s effort to acquire mines in South Africa, the United States and Australia, too is also moving at a snail’s pace. Last financial year, its billing for the power sector was Rs 40,000 crore. However, this year, rain, law and order issues and poor availability of rakes resisted the coal major from meeting the target to power sector.
A top CIL official said this addition of 220 MT is difficult, due to the environment issues. As per the figures available, at least 131 proposals are awaiting stage-I forestry clearance in the state and the Ministry of Environment and Forests (MoEF), and 49 projects are waiting for stage-II of forestry clearance. On the other hand, 74 projects are stuck at different levels of environment clearances.
According to N C Jha, former chairman and managing director of the firm, who retired last month, these environmental and forestry issues are the biggest hindrances for CIL’s growth, the government has to strike a balance and give these clearances in a swift pace. The firm’s demand supply gap this financial year is supposed to be above 130 MT. While it produced 431 MT of coal last fiscal, Chatterji had said it is likely to be around the same level.
Chatterji, who is also an additional secretary to the ministry of coal, had said the Ministry of Coal and MoEF are working closely to solve the issue. A meeting of the group of ministers is likely to take place on March 1, regarding environmental issues.
Meanwhile, regarding the fuel supply agreements (FSAs), Vaidya said, “We never said no to any power firm regarding FSAs. After 2009, we have signed at least nine FSAs for new power stations for a period of five years. At present, we are having FSAs with about 80 of the existing power plants.” The PMO statement had said the coal major would be penalised if it fails to meet the supply trigger of 80 per cent to the new power plants.