Coal India To Start Importing Directly In 2010

Coal India Ltd will start its innings in international trade in coal this year, according to its Chairman, Mr Partha S. Bhattacharyya.

According to sources, the coal major has already finalised a tender document to import four million tonnes of thermal grade coal for supplies to NTPC. The total import (for the power sector) is expected to touch 8 mt in 2010-11.

It may be mentioned that the New Coal Distribution Policy requires Coal India to import coal to bridge the demand-supply gap of thermal coal in the country beginning 2008-09.

However, in the absence of adequate infrastructure and expertise in international trade, CIL had nominated MMTC Ltd for importing on its behalf.

But this is just the beginning. If everything goes according to plan, CIL may replace MMTC as India's largest coal importer in the next couple of years. The initiative will receive a shot-in-the-arm if CIL's recent efforts to strike “strategic alliances” with major producers across the world becomes a reality.

MMTC and three other central PSUs – State Trading Corporation, PEC Ltd, MSTC – currently buy much of the approximately 60 million tonnes imported coal requirement of the country. Of the total imports, approximately 30 per cent is coking coal used in the steel industry.

Of the total thermal coal imports of approximately 40 mt, nearly 30 per cent is consumed by NTPC.

“For the first time, since inception in 1975, we will start importing coal directly in 2010. The board has already approved our draft tender document and we are currently tying up port facilities across the country,” Mr Bhattacharyya told Business Line.

CIL's Director for Marketing, Mr A.K. Sarkar, is currently visiting various ports in the country and has already engaged in talks with various major and minor ports, including Vizag and Gangavaram ports in Andhra Pradesh, the upcoming Dhamra port in Orissa and others.

As a spin-off of its proposed foray into imports, CIL is also in dialogue with the Shipping Corporation of India to form a shipping joint venture to facilitate coal imports in the country.