Coal India rushes to supply power plants with critically low stocks

By Krishna N Das

NEW DELHI (Reuters) - Coal India is rushing to supply coal it has sourced from railway sidings, loading areas and other places over the years to feed power plants critically short of the fuel, a company official with knowledge of the matter said.

The move is part of emergency measures taken by the state giant to prevent a shutdown of nearly one third of India's thermal power plants that have coal stocks of less than four days - a situation last seen in one of the worst blackouts in 2012. A few power firms have already switched off some units.

Adding to power companies' concerns is a warning by Coal India unions to go on a three-day "work to rule" this month demanding the return of coal blocks allocated by the government mainly to private firms and declared illegal by the Supreme Court last month.

The top court is expected to decide on the 218 blocks in a hearing on Tuesday. Confusion surrounding the blocks awarded over the past two decades has meant only a handful of them are producing, making India rely heavily on imports.

Coal India, which accounts for more than 80 percent of India's total production, has about 30 million tonnes of accumulated "carpet coal" that is being sent to companies on a priority basis, said the official who declined to be named as he is not authorised to talk to media.

"We have requested our units to push this coal from stock to power stations which are in a critical condition," said the official. "Where critical or super critical power stations are there, we have already advised our subsidiaries to enhance their off-take so that they come out of critical condition."

The company has also advised power firms to use trucks to carry coal from remote mines, like the Amrapali open cast pit in Jharkhand.

India's railway network is often clogged, delaying delivery to power stations.

India suffered unprecedented power cuts on July 30-31, 2012, that affected 620 million people - nearly a tenth of the world's population - in 22 states across the north and east of India.

Heavy rains in eastern India has also hurt coal mining, with output falling to 1 million tonnes per day over the past week from an average of 1.3 million.

The production loss and a lack sufficient transport infrastructure could result in the company falling short by 30 million tonnes of its targeted coal supply to the power sector. It had planned to supply 408 million tonnes for the year through March 31, the official said.

This will result in a further increase in inbound shipments to the country, already the third largest importer of coal.

(Editing by David Evans)