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Coal India Ltd's plan to import through long term off-take contracts may not materialise before the end of this fiscal.
Having received 18 bids from 12 companies in May, Coal India has reportedly shortlisted 11 bids from five companies. The company is expected to seek board approval for entering into memorandums of understanding (MoUs) with the most competitive bidders by September this year.
This is, however, just the beginning of a long-drawn procedure to effect such imports.
Once the sources are identified, the company has to secure firm purchase commitments from Indian buyers ready to fork out a service charge to it. Backed by the commitments from the buyer and the seller, the company will take the board's approval before entering into back-to-back agreements.
Progress should also be made in putting in place end-to-end supply logistics.
Joint venture
The company has already proposed a joint venture with Shipping Corporation but is yet to incorporate it, which means another few rounds of board approvals.
“We are trying to firm up the entire plan and start importing by the end of 2011-12,” a senior company official told Business Line, adding that further delay may send wrong signals to overseas miners, including prominent names such as Rio Tinto, Xstrata, Peabody, Massey Energy and Sinarmas.
According to the CIL official, the company is now evaluating the bids, which include identifying the lowest bidder and offering others an opportunity to match the bid.
“Once the process is complete we will seek board approval, tentatively in September, to strike MoUs with the prospective suppliers,” he added.
More in the fray
Coal India sources said Neyveli Lignite Corporation has expressed interest to procure 2.5 million tonnes of imported coal through it annually for a proposed coal-based power plant at Tamil Nadu. NTPC previously expressed interest to source a part of its import requirements through the company. NTPC consumes 160 million tonnes annually, including 12 million tonnes of imported varieties. Also in the queue is Kolkata-headquartered Damodar Valley Corporation.
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