The Hindu Business Line : Pvt investors interested in setting up coal washeries

A TOTAL of 66 private investors are reported to have shown interest in setting up non-coking coal washeries for various public sector thermal power generating units in the country.

The interest was shown in response to an invitation by the State-owned Coal India Ltd (CIL) seeking expressions of interest (EoI) from prospective investors in this line of business.

Since almost all investors have submitted EoIs without having any firm offtake commitment from end-users, they have been advised to have firm tie-ups with CIL's existing bulk consumers of coal.

Such tie-ups are required as the existing statutes do not permit linkage of coal to a private washery operator. Similarly, the State electricity boards have been informed of the interest shown by the prospective investors and have been asked to identify and select investors for washing their coal.

In fact, realising the need for the use of washed non-coking coal and the interest shown by some SEBs in getting washed coal at competitive rates, CIL has taken a fresh initiative to facilitate the setting up of non-coking coal washeries through the build-own-operate (BOO) route.

It will provide land on rent, water, electricity during construction and a railway siding, if available — all on payment basis.

Incidentally, CIL had, in the past, arranged for the supply of washed non-coking coal to consumers by getting coal washeries constructed through the BOO route, but its initiative could not fructify for want of consumers of washed coal.

Now that some SEBs/power utilities have taken initiative to set up washeries through private investment route, CIL has thought it proper to take a fresh initiative to act as a facilitator to help set up non-coking coal washeries.

As stipulated by the Union Ministry of Environment and Forestry, power stations more than 1,000 km away from coal mines have been barred from using non-coking coal with more than 34 per cent ash content.

The requirement of such coal has been estimated at about 93 million tonnes (m.t.) per annum, which is expected to rise to 110 m.t. by the end of the Tenth Plan and to about 128 m.t. by the end of the Eleventh Plan.

With the environmental stipulation getting increasingly strict, it is likely that in the near future all coal will have to be washed before being burnt for use.

This emerging scenario will provide several opportunities for private investors to invest in the business of washing/beneficiating non-coking coal, specially in view of the fact that CIL is not in a position to set up coal washeries of its own due to a shortage of resources, a CIL source said.

Meanwhile, co-ordination by CIL has helped setting up a few washeries in the private sector. These include 11-m.t. per annum (mtpa) capacity of non-coking coal washery at Mahanadi Coalfields Ltd (MCL) by ST-CLI for Andhra Pradesh Generating Company, 3.5 mtpa capacity for Punjab State Electricity Board to be constructed through Monnet Daniel Company.

This apart, Maruti Clean Coal Ltd have started setting up an 10 mtpa capacity washery at Korba coalfield, while the Maharashtra State Electricity Board is learnt to have selected a private washery operator for washing its coal. Damodar Valley Corporation has shown interest in getting the coal washed. A large number of other sector consumers such as cement, sponge iron have also evinced interesting in getting washed coal.