Financial Daily from THE HINDU group of publications
Friday, Jun 18, 2004
Industry & Economy - Coal
Coal India to discontinue selling directly to non-core sectors
Kolkata , June 17
IN a bid to plug loopholes of the existing marketing policy for non-core sector consumers, Coal India Ltd (CIL) has decided to discontinue selling coal in future directly to non-core sector consumers even though they have linkages with mines belonging to its seven operating subsidiaries.
As an alternative marketing mechanism, CIL has asked the State Governments to assign one of their wholly-owned subsidiary agencies or corporations to lift the required quantity of coal and supply it to non-core consumers located in their States.
This sort of measures is felt essential not only to reduce workload on its marketing department but also to weed out " clandestine" deals between consumers and officials in the State-owned coal companies.
CIL sources said that the company had been trying for the last couple of years to identify actual consumers from non-core sector, but it had yet to finalise a list because many State Governments co-operated by submitting then names of function coal-consuming companies in their States.
CIL, in the mean time has reduced or stopped supply coal to non-sector industries which altogether consume only about five to six million tonnes (mt) of non-cocking coal per annum its total annual dispatch of about 304 mt, out of which about 290 mt goes to core sectors such as power, steel, cement, fertiliser, aluminium and paper.
Meanwhile, the Union Ministry of Coal and Mines is going to take tough stand against those companies who have not yet developed virgin coal blocks even though got those blocks seven to eight years ago. The Minister has identified a total 136 virgin blocks for the purpose of developing them through captive use by private sector companies.
Of the total blocks identified, 40 blocks, with a total reserve of about 4,000 million tones were already allotted. Only three such blocks have been developed so far.
In order to arrive a decision on the above issues, a meeting has been convened by the Ministry in New Delhi on June 28, of groups of coal consumers, their associations and chambers of commerce, to decide/review the modalities of available coal distribution.
Another meeting is also convened on the same day to examine new applications for virgin coal blocks. The sources said the Ministry, this time, would introduce some system of transparent competitive bidding to ensure earliest production from allocated blocks or else forfeiture or penalty.
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