Govt urges coal producers to improve quality amid ongoing complaints

By Rajesh Kumar Singh

 

India is urging its coal producers to improve fuel quality amid ongoing complaints from the power sector, which sometimes receives shipments that don’t meet agreed specifications. 

The power ministry, which set up a panel to address the issue, proposed measures such as testing coal quality upon arrival to customers, according to people with knowledge of the matter. It also recommended examining multiple layers of the stock pile instead of just the surface level, a method known as auger sampling, to ensure accuracy, the people said, asking not to be named as they are not authorized to speak to media.

 

 

Coal is typically sampled from railway coaches at the loading sites, and suppliers such as Coal India Ltd. bill the customers based on its quality. But what reaches the power stations is sometimes of lower heating value and can contain mud or rocks that can damage plant machinery, the people said.  

 

This discrepancy has a wider bearing on the power sector, which is heavily reliant on coal. To make up for a lower calorific value, customers end up buying more from miners, ultimately passing the cost onto consumers. Greater volumes also burden an already strained railway network, aggravating the competition between freight and passengers for carriage space in the summer months, when demand is higher.

 

Coal India didn’t respond to emailed questions, while the power ministry didn’t immediately respond to a request for comment emailed outside office hours.  

 

“This issue has been lingering for years. Coal India can no longer afford to brush aside these complaints,” said Rupesh Sankhe, senior vice president for research at Elara Capital India Pvt. Ltd. “India is fast turning from a sellers’ market into a buyers’ market for coal and the miners need to be more responsive to customers’ needs.”