Panel to decide on model to grade coal: Centre

The coal ministry has decided to set up a committee to determine the value of coal by allocating a calorific value to it, a senior official of the ministry has told Business Standard. However, NTPC, the largest power company and user of coal in India, is opposing the move.

“The committee has been set up, but there are a few issues regarding clauses for grading or framing of international standards. The largest consumer (NTPC) feels that grading must not be removed,” said the official.

In India, the existing system used to grade coal is UHV (useful heat value). In other countries GCV (gross calorific value) determines the quality of coal. Indian coking coal is broadly divided into six grades and non-coking coal into seven grades.

The coal ministry wants to abolish the grading system and implement a system wherein coal would be graded on a single parameter as it is done elsewhere.

This system of grading, according to NTPC, would not be fair as coal in India is of lower standard and, therefore, is required to be graded to determine its worth. Indian coal standards, NTPC said, need to match international standards before grading could be done away with.

“We do have an issue with lower grade coal being used at the same grade as the coal available abroad. One cannot use their methods of measuring the value of coal as Indian coal is not up to international standards,” said an NTPC official.

At present, Coal India is selling coking coal at Rs 440 to Rs 2,200 per tonne, depending on the grade of coal and the company that owns the field. Price of non-coking coal, on the other hand, ranges between Rs 1,120 to Rs 3,750 per tonne, determined by the grade and coal field.

NTPC uses around 73 per cent, amounting to around 313 million tonnes, out of the total of 431 million tonne produced in the country.

Due to the apparent poor quality of coal produced in India, the country’s imports have reached a record high this year at 70 million tonnes and is expected to rise to 84.4 million tonnes in 2010-2011, indicating a rise of 21 per cent.

India’s coal production stands at 533 million tonnes and is likely to reach 571.87 million tonnes in 2010-2011, said an official.