Railways may join Coal India, SCI joint venture

To find an end-to-end solution for the logistics woes on supply of coal, two public sector navratna giants Coal India Ltd (CIL) and Shipping Corporation of India (SCI) are in talks to rope in Indian Railways to their joint venture.

“CIL and SCI had formed a joint venture in December and now we are trying to extend this to Railways. We are in talks with them and the initial response that we got is very good. Once they join, we will be able o solve the logistics problems related to coal. Interactions are happening with them at every level,” Coal India Chairman Partha S Bhattacharyya said.

With the country poised to import 142 million tonnes in 2011-12, the development holds significance as a tie-up with railways will help CIL in transporting the imported coal to its destinations.

“To further reduce the cost of imports, we are planning to have two captive ports, one each in Eastern and Western parts of the country. We are also mulling options to have our own ships. Through these steps, we can lessen the port handling charges,” he added. Import figures for the current financial year is expected to touch 85 million tonnes.

While the total production of coal in the country is projected at 630 million tonnes in 2011-12, demand stands at 713 million tonnes. With the domestic production targets of coal slowing down due to environmental hurdles and land acquisition problems, coal producers have been seeking assets abroad to help meet the shortfall.

Meanwhile, the world’s largest coal company has identified Deocha-Panchmi block at Bankura district in West Bengal for its proposed foray into coal-to-liquid (CTL) project. The company has approached the coal ministry regarding this. The overall investment for the project would be around Rs 45,000 crore which might be funded through a joint venture.

Currently, SASOL and Lurgi are the two companies which have the CTL technology.

“This would help the country to insulate itself from the volatility of internal crude prices. The block has a huge reserve of 19 billion tonnes, which could be exploited for burning coal to form oil," he added.