By Sumit Moitra,DNA
Kolkata: Failure to supply adequate coal to the power sector creating spectre of wide spread power outages across the country has forced.
The coal ministry has directed Coal India to offer 4 million tonne of coal earmarked for the lucrative e-auctions to state-owned power plants in a bid to tide over the fuel crisis.
Coal India said the diversion is only for October.
Diversion of coal from e-auction to power sector, to which coal is sold at the base or notified price, would surely impact its profitability.
Coal India is supplying 900,000 to 950,000 tonne of coal to power plants every day, chairman Nirmal Chandra Jha said on Friday, without elaborating.
“The power sector is facing acute shortage of coal. In order to make more coal available to them, this month’s e-auction quota is being offered to them to lift the coal from as-is-where is basis by making their own arrangement. And that will be within the overall FSA quantity,” Jha said.
The miner has contracts to sell 347 million tonne of coal to utilities this year, said IA Khan, a deputy adviser at India’s Planning Commission.
“Most of the problems caused by heavy rains have been resolved, but we are hearing that there could be more strikes,” Choudhury said. “The situation in Telangana is fluid, but we’re doing our best to get back to normal.”
Pinakin Parekh and Neha Manpuria, analysts with JP Morgan said in a note on Friday that e-auction coal sales contributed 26% of Coal India’s Ebidta or operating profit, based on the first-quarter figures, and 11-12% of volumes.
State-owned power producer NTPC is struggling to keep some of its units going as coal supplies hit an all-time low partly due to Coal India’s overall poor output and also due stoppage of mining at Singareni Collieries due to the Telengana agitation.