Coal India is working out a plan to substitute imports in the power sector to survive the slowdown in sales that remained flat in the April-August period.
According to some sources, popular import varieties from South Africa (5,500 kcal) and Indonesia (4,200 kcal) have become costlier by 5.5 per cent and 19 per cent respectively over the past 45 days. Import of thermal coal is down 12 per cent this fiscal.
Imported coal is used in power generation for two purposes. While the plants in the hinterland use limited quantities of these for blending, to meet emission standards, coastal power plants (away from the mining zone) run on low quality imported fuel for its freight advantage.
CIL is now planning to replace both the demands, partly or fully. While it is now flush with low calorific value coal, the limited quantities of high-value coal available in Ranigunj in West Bengal and Korea Rewa in Chattisgarh - which did not find too many takers in the past - can be used for blending.
To make it workable CIL will make Railways and port authorities party to the negotiation so that coal can be supplied to these consumers at a lower price than the imported coal.