Coal India to source 6 MT more coal from overseas; floats medium-term tenders to boost domestic supplies

State-owned CIL on Friday floated two medium-term tenders for sourcing 6 million tonnes (MT) of coal from overseas, a move aimed at securing domestic fuel supplies amid the fear of shortage during monsoon.

These two tenders for a total of 6 million tonnes coal have an option of increasing the bid quantity by 100 per cent to 12 MT.

The development comes a day after the public sector unit floating its maiden tender to import 2.416 million tonnes of coal.

The import tender was floated after the government asked the company to build up stock of fossil fuel to avoid the reoccurrence of power outages, which happened in April on account of shortage of the fuel.

Read | India ramps up coal output to reduce dependence on imports

"In an urgency to shore up coal stocks at the indigenous coal-based power plants, as directed by the government, Coal India Limited (CIL) on Friday floated two international competitive bidding e-tenders of 3 million tonnes each to source coal from abroad," the company said in a statement.

Though CIL is on its full steam in augmenting the production to meet the domestic demand of the country, this is a step towards a state of readiness to combat futuristic coal supply crunch if any, the PSU said.

The tenders are not indent based but to keep coal on tap for immediate availability and use in future. It is an advance action by the maharatna firm in fortifying future supplies and keeping a vendor ready.

The tenure for placement of order is for a period of one year beginning next month till June next year. The minimum indent quantity will be 50,000 tonnes.

As and when indented by the state generating companies (gencos) and independent power plants, orders will be placed to ship the coal into the country. From the date of placing the indents delivery of coal would be made within 30 days at the free on rail destination of the power plants which seek coal. This means delivery at the doorstep.

For the 6 MTs coal sought through competitive bids, nine destination ports have been identified for the discharge of coal -- 3 MTs each at the eastern and western coasts of the country.

The estimated value of the work is pegged at Rs 3,850 crore for each tranche of three million tonnes.

"This comes close on the heels of a short term e-tender of similar nature that the state owned coal mining behemoth issued on June 8. However, that was for a limited period and limited quantity," it said.

The last date for submission and opening and the bids received is July 5.

With little or no experience in coal imports, CIL has floated two back-to-back international competitive bids, as assigned by the government, in a record time adhering to the timeline set.

"In a first-ever, Coal India Limited on Wednesday floated an international competitive bidding e-tender, seeking bids for import of 2.416 million tonnes (MTs) of coal," the company had said in a statement on Thursday.

The coal being sourced on behalf of the state gencos and Independent Power Plants (IPPs) is based on the indents received from them.

It is for July-September period of the current fiscal year.

Though coal import is an uncharted terrain for CIL, within a week of receiving indents from the seven state gencos and 19 IPPs, for a total of 2.41.6 MTs of coal, the company on a war footing has finalised and floated the tender.

The current short-term tender for import of dry fuel for the second quarter of the ongoing financial year is source agnostic. This means the coal can be sourced from any country.

The Centre had nominated the maharatna firm as a centralised agency to increase coal supplies to state gencos and IPPs through import of dry-fuel at a time when the demand for coal is high.

The company's board had last week given its go-ahead for the public sector unit to proceed ahead with the issuance of two international tenders -- a short-term and a medium-term -- for sourcing coal from overseas.

The last date for the receipt of bids is June 29. There is an option of pre-bid meeting on June 14 to seek clarification on any nuances of the tender, CIL had said.

After the price discovery, CIL will immediately execute a contract with the successful bidder for supply of coal. Then the state owned coal miner will enter into a back-to-back pact with state gencos and IPPs to whom coal has to be supplied.

The coal imported will be routed through nine ports located in east and west coasts of the country.

The successful agency, selected through the bidding process, will deliver coal at the doorstep of the power plants of state gencos and IPPs.

In April, coal secretary A K Jain had attributed the low coal stocks at power plants to several factors such as heightened power demand due to the boom in the economy post-COVID-19, early onset of summer, rise in the price of gas and imported coal, and sharp fall in electricity generation by coastal thermal power plants.

In April, several parts of the country witnessed power outages on account of coal shortage. He had said a lot of measures are already underway to enhance the total power supply in the country.