The Hindu Business Line : Shortfall at Talcher mines — Paradip port scouting for new sources for coal shipment

A slump in the production of coal in the Talcher mines of Mahanadi Coalfields Ltd and the consequent drop in its coastal shipment has sent the Paradip Port Trust to look for new sources of supply.

The Paradip Port Trust believes that coal from the IB Valley mines, also under Mahanadi Coalfields, should be allowed for coastal shipments to make up for the shortfall in throughput.

Right now, the shortfall is not much, about one rake a day - an estimated 5.45 rakes, against the linkage of 6.45 rakes. But, if allowed to persist, it will develop into a large figure. Thus, at the current rate, the shortfall will be about one lakh tonnes a month or more than a million tonnes a year.

Worse, given the current trend, there is no guarantee that the shortfall of one rake will not get magnified into two or more rakes a day.

However, several factors militate against the proposal for replacement of Talcher coal by IB Valley coal.

First, such a replacement will entail an additional transportation cost of about Rs 200 per tonne. The IB Valley mines, compared to the Talcher mines, are more than 200 km away from the port. Second, the IB Valley coal is reportedly inferior to that of Talcher coal. Finally, the Railways might not be too inclined to change the existing arrangement.

The plan for rail movement of coal is finalised well in advance on the basis of coal linkages. It will be hard for the Railways to change this plan on a short notice.

However, as Paradip Port Trust sources point out, the argument of the Railways is untenable as some coal from the IB Valley has already moved to the Angul plant of the National Aluminium Company to meet the requirement of the public sector aluminium giant. Such movement could not be as per the linkage, it is felt.

Interestingly, the drop in domestic movement of coal from the Talcher mines has not hit the East Coast Railway hard, at least revenue-wise. If anything, the revenue earning has jumped by an estimated 20 per cent so far in the current fiscal, vis-à-vis the same period last year, according to East Coast Railway sources.

This has happened because the drop in domestic coal movement has been more than compensated by the rise in the movement of non-coking coal imported through both the Paradip and the Visakhapatnam ports. For instance, Paradip alone has handled an additional one lakh tonnes of imported non-coking coal every month for the past three months. The estimate is that the total throughput of non-coking coal import at the Paradip port in the current year might be around 1.5 million tonnes.

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