NEW DELHI: The commerce ministry, in an effort at ensuring wider say in trading of minerals for public sector units (PSUs) in its domain, has said that MMTC and the State Trading Corporation of India (STC) could import coal to help Coal India (CIL) meet its obligations under the fuel supply agreements (FSA).
CIL is expected to ink FSAs with at least 48 power companies within a fortnight to supply 54 million tonnes of coal to fuel the generation of 18,522 MW of power.
In a letter on April 16 to principal secretary to the Prime Minister, Pulok Chatterji, commerce secretary Rahul Khullar said that given CIL’s precarious coal output position, the company would very likely resort to imports to bridge the demand-supply gap.
In such an eventuality MMTC and STC could be pressed into service. “Given the long standing experience and core capability in international trading, the PSUs of the commerce ministry are well positioned to support the efforts of CIL to import coal,” Khullar wrote. The commerce secretary’s position is based on the premise that with little over 1 per cent growth in CIL’s production this fiscal, at 435.84 MT, preceded by virtually zero growth last year, the company would face challenges in meeting its obligations.
“I trust that the demonstrated capability of our PSUs to deliver timely supply of coal at the best possible prices will qualify them as natural partners to be associated in imports by CIL,” the commerce secretary wrote in the letter. The commerce ministry had in February moved a note for the Union Cabinet seeking the routing of all iron ore exports from the Goaregion through MMTC to arrest the mineral’s theft and loss of revenue to the exchequer.
The PMO, on February 1, had asked CIL to execute FSAs by March 31 with a trigger level of up to 80 per cent, which the company failed to carry out.
This was followed by the imposition of a Presidential Decree making it obligatory for CIL to execute FSAs. The CIL Board approved the FSA document, which mandates the company to supply at least 80 per cent of the requirement of each company.
MENU 