CIL needs to produce 220 million tonne more to meet PMO directive

Wednesday, 29 Feb 2012

BS reported that Coal India Ltd 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 MW that would be commissioned by March 2015, the firm has to produce an additional 220 million tonnes 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.

Mr HK Vaidya chief general manager (sales and marketing) of CIL said that “In 2009-10, we had supplied 298 million tonne to the power sector. In 2010-11, it increased to 304 million tonne and this financial year we expect to supply 310 million tonne, though our target was 347 million tonne. 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 million tonne of coal.”

According to experts, 4.4 million tonne 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 Ms 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.

A top CIL official said this addition of 220 million tonne 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 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 Mr NC 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.

(Sourced from BS)