CIL mandated to replace at least 100 MT of imports with domestic coal in FY21

State-owned CIL has been mandated by the government to replace at least 100 million tonne (MT) of imports with domestically-produced coal in the ongoing fiscal.

The development comes at a time when the country on the one hand has abundance of domestic coal, while on the other hand there is a slump in demand of the dry fuel.

"Coal India (CIL) has a mandate of replacing at least 100 MT of imported coal with domestic non-coking coal in the financial year 2020-21," an official said.

In its bid to substitute imports with domestic coal, CIL is connecting with non-regulated sectors like sponge iron, cement, aluminium for domestic coal, the official said.

Moreover, the PSU has also removed many extra cost and reduced the reserve price to zero, the official added.

The country imported 247.1 MT of coal in 2019-20, about five per cent higher than 235.35 MT imported during 2018-19.

Coal Minister Pralhad Joshi had earlier written to state chief ministers asking them not to import the dry fuel and take the domestic supply from CIL, which has the fossil fuel in abundance.

The power sector, a key coal consumer, is grappling with weak demand due to the lockdown and plants are operating at lower capacity, bringing down the demand for coal.

To boost coal demand, the government has announced a slew of measures like increased supply for linkage consumers.

It has also announced several relief measures for CIL consumers, including the power sector.

The PSU closed the financial year 2019-20 with coal production of 602.14 MT, against the target of 660 MT.

It is targeting 710 MT of coal output in the ongoing financial year.