CIL’s export plan on holdover domestic demand

Coal India’s (CIL’s) plans to export coal to SAARC countries has been put on the back-burner as the state-owned miner is facing a steep challenge to supply adequate coal to domestic power plants.

“Some importers from Nepal have approached us to open a permanent export channel there and we are in talks with them,” a senior CIL official said.

However, keeping the coal shortage in mind, CIL has decided to first cater to the domestic power, steel, cement, and ancillary sectors and would thereafter consider opening a “serious export channel for SAARC (South Asian Association for Regional Cooperation)”.

“The first priority is to feed power plants. We have undertaken many rationalisation initiatives to smoothen the supply to power plants. Moreover, the demand from the steel and cement sector is reviving and we first need to make enough coal available to cater to their demand,” the executive said.

CIL has decided to opt for exports only if it has surplus stocks and a negotiated price with foreign buyers, namely SAARC countries.

Moreover, the company is targeting to reduce import of about 200 million tonnes (mts) of coal by 50 per cent in the ongoing fiscal and has set an internal target of 652 mt output, which is higher than the 630 mt target given by the coal ministry.

However, by the Augustend, CIL’s production stood at 216.23 mt and as many as 15 power plants continue to reel under severe coal shortage.

In the early parts of last year, faced with a huge coal inventory of about 69 mt in face of a severe dip in demand from the power sector, CIL had initiated dialogues with Bangladesh, Bhutan and others. Although talks with Bhutan fructified, the total export quantity is extremely limited and is used by cement manufacturers there.

On the other hand, talks with Bangladesh had an inconclusive end, although the coal behemoth began readying its subsidiary — Mahanadi Coalfield — to supply coal to India’s eastern neighbour from the Paradip port in Odisha to supply 2-3 mt coal.However, the coal crisis hit soon during mid2017 and CIL began to rout the black diamond to the power plants on a war footing.