Coal India, the government owned entity, which is also the world’s largest coal miner will be importing the fuel for the first time in years amid looming power cuts.
A letter from the Union Power ministry accessed by Reuters highlighted the urgency to import the fuel. The company had last borrowed coal in 2015. However, the crisis reemerged in the month of April, when India witnessed its worst power cuts in six years.
The ministry released the letter on Saturday which read, “Coal India would import coal for blending on government-to-government (G2G) basis and supply … to thermal power plants of state generators and independent power producers (IPPs)”
It was sent to all utilities and top officials including the Coal secretary and the Chairman of Coal India. Amid growing demand of electricity, India is expected to face sever shortage of the fuel in the third quarter of 2022.
The decision to import Coal has arrived upon after consultation with all states, out of which most of them suggested the power ministry to go ahead with the plan of a Centralised procurement under Coal India. Ealier this year, utilities were asked to increase coal imports to assist the growth of local coal. It also warned of a shortage if the power plants did not build up coal inventories through imports.
“The tenders under process by state generators and IPPs for importing coal for blending may be kept in abeyance to await the price discovery by Coal India through G2G route, so as to procure coal at least possible rates” said the ministry.
However in Its letter on Saturday, the power ministry has asked states to suspend the pending tenders. Coal inventories have witnessed a sharp decline in the past few years.
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