The methodology for auction for coal mines/blocks for sale of coal under the provisions of the Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957 has been approved by the Government and Order in this regard has been issued on 27.02.2018. Auction of coal mines for sale of coal is expected to bring efficiency into the coal sector due to increased competition and deployment of best possible technology into the sector. Increased competition in the market will lead to higher domestic production, better utilization of mining resources for development of India and ensure assured coal supply.
Coal India Limited (CIL) always put their best effort to segregate/remove foreign materials like stone, shale etc. present in coal but due to heterogeneous composition of coal seam along with thin inter-band of shale and stone, the presence of some stone, shale and sand in the coal supplied to the consumers cannot be ruled out completely. That is why the provision of +250 mm stone compensation has been kept in the Fuel Supply Agreement (FSA).
Requisite quality and quantity of coal to all Power Station under FSA are being supplied by CIL. In terms of FSA, third party sampling facility is provided to the power utilities for assessment of quality of coal. From January, 2016, CIL has started supplying (-) 100 mm sized coal to all power plants except the pit head power plants.
The quality and quantity of coal supplied by CIL is made as per bilateral agreement between coal companies and consumers. Coal companies are supplying the requisite quality and quantity of coal to Captive Power Producers and Aluminium sector under FSA. Besides this, third party sampling facility has been extended for all consumers and, therefore, if there is any quality variation in third party result, same is compensated to the consumers through debit/credit note.
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