Coal India relaxes norms for small consumers

Coal India (CIL) has now made supply norms flexible for small consumers at a time when the Union coal ministry is absolutely focusing on supplying coal to the power sector only. The coal behemoth has relaxed its policy for mine-specific coal supply, which would ease availability of coal to consumers having less than 1 million tonne requirement per annum. This would benefit a large number of linked small consumers, who are at present starving for coal for increased demand from the power sector.

CIL said the Mine Specific Coal Supply policy was conceived in 2011 to enable small consumers benefit from assured supply from a preferred source. This also helped in reduction of logistics cost. However, the policy was applicable to consumers having a minimum requirement of 1 mt of coal per annum from mines, which have production capacity of 2.5 mt per annum.

The CIL board has now cleared the norms to accommodate greater number of consumers under the ambit of the policy. The minimum per annum requirement of a consumer has been brought down to 0.25 mt from 1 mt per annum as also the production capacity of mines participating under the policy has been brought down from 2.5 mt per annum to 1 mt annum, which means more mines can come under the policy.

“The change would be a boon to the consumers having requirement of small quantities,” a CIL statement said. A CIL official clarifying the statement said the change in the policy has been made considering the market dynamics, profile of consumers as well a profile of the mines, which vary from subsidiary to subsidiary. “It was felt there was a need for a flexible mechanism to enable coal companies to explore willing consumers of all sectors with whom mine specific coal supply arrangement can be made from existing and new mines. The policy is mutually beneficial since a part of the savings in logistics costs to the consumers shall be shared with the coal companies,” a CIL official said.

Another major relaxation of the policy is that the threshold levels of consumers’ requirement quantity and per annum mine production capacity norms could be reduced even further by CIL subsidiaries if deemed appropriate for enlarging the reach of the policy to benefit maximum consumers. Consumers can lift coal from the existing sidings of coal companies or opt for road cum rail mode of transportation to lift the coal. Captive mode of transportation being environment friendly is also beneficial in terms of cost. Consumers shall be encouraged to develop such infrastructure under separate contract arrangement with coal companies.

he revised policy shall be implemented in a manner where all linked consumers can participate for securing mine specific allocation of coal, a CIL official said.