Coal India in talks with Bangladesh for coal exports

India's biggest coal company CIL is in "deep consultation" with Bangladesh to export the dry fuel, Coal Secretary Anil Swarup said on Tuesday.

The development comes in the backdrop of a sharp decline in demand for coal as well as with an inventory of over 80 million tonnes (MT) of the fuel at the pitheads and power plants.

"We are already into it and they (CIL) are in very deep consultations with Bangladesh for exporting it," he told reporters on the sidelines of an event here.

Exports to Bangladesh would also aid CIL in increasing sales as India in July inked a landmark deal with Bangladesh to construct a 1,320 mw coal fired power plant, the biggest project under bilateral cooperation.

On the decline in offtake and volumes, he said as of March 31, there was an inventory of over 80 MT both at the pitheads and power plants.

"Where would they stock the coal. We had more than 80 MT. Now if your entire production in 500 odd MT and you have 80 MT of stocks, you will have to look at it and that is why CIL did not produce more. Second reason is that in August there were unusual rains, which impacted mining.

"I don't think it is an issue as they (CIL) will catch up as there is exposed coal available and can meet the requirements," he added.

On coal production target, Swarup said the ministry is working towards achieving the coal production target of one billion tonnes and will decide on reviewing this after 2-3 years. The government has not scrapped this target.

The government has set a production target of 598 MT for CIL for the ongoing financial year. The miner is eyeing to double its production to 1 billion tonnes by 2020.

When asked about subdued demand, he said the government does not make plans keeping in view the present situation.

Explaining further, he said: "We plan for the future. Our power plants are working at a plant load factor (PLF) of 62 per cent, but in the future we believe this PLF will go to 70 per cent and that is the time when we will have more demand.

"Also additional capacity will be added. So there is no logic in bringing down coal production. What will we do if there is demand in the future."

Another point is that with UDAY, the financial position of the state discoms will improve and this will also have a positive impact on coal demand, Swarup said.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel