The Hindu Business Line : `Thermal plants must help set up washeries'

A LARGE number of existing thermal power plants located beyond 1,000 km from coal pitheads may find it difficult in the long run to get domestic coal with ash content limited to 34 per cent as stipulated by the Ministry of Environment and Forests unless they come forward to help set up washeries to wash high ash content coal.

Stating this on Friday at a seminar on `Mining and washing of non-coking coal in India', Mr Sashi Kumar, Chairman of Coal India Ltd (CIL), said that coal companies under its fold might be able to supply a maximum of 60 million tonnes (mt) with ash content not exceeding 34 per cent even after washing and blending low ash content imported and indigenous coal compared to the requirement of about 93 mt.

He wondered how the gap of about 33 mt would be met in the absence of new washeries.

Mr Kumar said that CIL, under the circumstances, proposed to the utilities to invite private parties to set up washeries.

CIL would in turn serve as facilitator by providing land, water, rail siding facilities and electricity to private washeries besides supplying raw coal.

It is also ready to enter into legally enforceable coal supply agreements with State Electricity Boards and independent power producers (IPPs) to facilitate the arrangement.

Despite resource crunch due to huge outstanding from SEBs, CIL had initiated the process of setting up washeries under build-own-operate (BOO) concept, but the power plants had not been forthcoming in guaranteeing payment. "In the absence of confirmed commitment, facilitator initiatives made by CIL have not yielded much result."

Later, Mr Kumar told newspersons that CIL was confident of creating an additional 51 mt mining capacity before the end of the 10th Plan, implementing some new mining projects.

A production target of 350 mt had been set for 2006-07 against the expected production of 301 mt and a net profit of about Rs 3,500 crore for the current fiscal.

To a question, Mr Kumar said that CIL had no immediate plan to revise coal prices in spite of the fact that the market situation was conducive to doing so.

"It would not be fair to revise prices in tandem with the rise in prices of coal in the international market. Moreover, since CIL is the main supplier of coal to thermal power stations, it has a different marketing approach, preferring to put less pressure on valued customers."

Mr Gautam Kumar, President of Coal Consumers Association of India, which organized the seminar, said that coal companies should supply only quality coal to the consumers so that imports are minimised.

Imports should be based only in national interests, he added.

The association said that more private sector companies should be given a chance to participate in coal mining in addition to the companies that have been allowed for captive mining of coal for production of iron and steel, power, cement, etc.

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