State-owned Coal India today said about 41 per cent of coal samples from its mines have been downgraded by the fuel quality watchdog Coal Controller.
"Under revised methodology, sampling and analysis of different seams/loading points was carried out through academic institutions and based on their results, Coal Controller Organisation (CCO) finalised the grades," Coal India said in a filing to BSE.
"In respect of Coal India (CIL), the institutions drew samples in respect of 871 size fractions/sidings of 386 mines. Consequently, 51.55 per cent retained their earlier grade, 40.76 per cent size fractions/sidings were downgraded, while 7.69 per cent were upgraded in reference to the Grade declaration during 16-17," it said.
Stock exchanges had sought Coal India's response over news reports that said "177 mines of Coal India downgraded on quality concerns".
In most cases, downgrading has been of one to two grades, Coal India said in its reply to bourses.
As per directives of the government, Coal Controller announced new methodology for declaration of grades.
Since the CIL dispatches most of its coal to power sector, ultimate realisation from sale continues to be derived from the analysed grade, done through third party assessment.
Such system has been in vogue since October, 2013. As such, impact of revenue can only be assessed after coal sampling and analysis over a reasonable period of time.
As per prevalent procedure, initial bills are always raised based on declared grades. Adjustment in the bills is made based on results of analysed grade.
Independent certification of coal grade through Coal Controller Organisation (CCO)and analysis through Central Institute of Mining and Fuel Research (CIMFR) will help Coal India Ltd (CIL) to achieve consumers' confidence and satisfaction besides less slippages in future, the PSU said.
Coal is a heterogeneous mineral, susceptible to qualitative variation particularly in Indian context because of its origin and formation. As per earlier practice, Annual Declaration of grade proposed by coal companies on the basis of sample collection and analysis of government accredited laboratories which was being approved by the Coal Controller in due course.
As per statutory provisions, subject of maintenance of grades require monitoring which is vested with CCO. Annual declaration of grades is a routine exercise, being carried out by coal companies as per directives and methodology prescribed by the CCO.