CIL may get nod to import coal

In a significant development, the Ministry of Coal is set to allow Coal India Ltd (CIL), a public sector company, to import coal to meet domestic demand. The change will be reflected in the new coal sales policy, expected to be out next week.

Conservative estimates suggest that during 2007-08, the country will need 474 million tonnes coal, against the projected supply of 385 million tonnes.

The new policy, sources said, would also have provisions for assured supply to the power sector and meeting the 75 per cent long-term demand of other sectors.

The policy has been categorised into two sectors"" power, supply to which will be regulated, and the de-regulated non-power sector. The latter would have to source 25 per cent supplies through e-auctions.

The policy, for the first time in the country, envisages taking help from IT companies for a national distribution network. The names of the companies is already under consideration.

"A consumer-friendly and holistic coal distribution policy has been prepared to meet the demand of all core and non-core sectors," said a source in the coal ministry.

The proposed mechanism involves signing of a fuel supply agreement with consumer industries. As a first step, the consumer will have to deposit earnst money and submit a letter of assurance that it will use the coal for the purpose for which it has been sought.

If the cumulative demand is beyond CIL's targeted production, the company can import coal from the overseas markets, at prices which do not hurt its revenue, say ministry sources.

The policy would also focus on the maximum permissible quality (MPQ) of coal that could be made available to bulk, medium and small consumers across the country. The necessity of a new policy arose after the deregulation of coal sales in January 2000.