Coal India will import coal for the first time as power crisis threatens to worsen

• Coal India on Thursday announced that it has floated an international tender to import 2.4 MTs of coal.
• This is the first time that India’s largest coal producer has issued a tender to import coal.
• The last date for the receipt of the bids is June 29, 2022.

Amid reports of coal shortage across the country, the state-run Coal India on Thursday announced that it has floated an international tender to import 2.4 million tonnes (MTs) of coal. The coal being imported is 5000 GAR (gross as received) thermal grade coal.

This is the first time that India’s largest coal producer has issued a tender to import coal.

The import would be carried out in the September quarter on behalf of state generating companies (gencos) and independent power plants (IPPS). The tender has also mentioned a provision to accommodate a variation of above or below 30% of the bid quantity.

The board of Coal India —in a meeting held on June 2, 2022 — gave its nod to proceed with the issuance of two international tenders for sourcing coal from overseas, a short term and a medium-term tender. The current short term tender for coal import for the July-September quarter is open to sourcing from any country or source.

“Though coal import is an uncharted terrain for CIL, within a week of receiving indents from the 7 State Gencos and 19 IPPs, for a total of 2.416 MTs of coal, the company on a war footing has finalized and floated the tender,” the company said in a statement.

Coal crisis expected to worse

India is expected to face a wider coal shortage during the third quarter of 2022 as the demand for power increased, Reuters reported last month citing an internal presentation of the Indian power ministry.

The ministry expects India to fall short of 42.5 million tonnes — or about 15% higher than the previous estimates — demand in the July-September quarter. This shortfall is being blamed on growth of power demand and lower outputs from some mines.

India also suffered from extreme coal shortage in the month of April as well, with only nine days’ worth of stock remaining. This resulted in long power cuts from Jammu and Kashmir to Andhra Pradesh in India. The situation was worsened by heatwave, which further increased the demand for electricity.

India had also witnessed a similar crisis last October when the country’s stockpiles fell to the lowest point in years. The country only had inventories worth five days, but the situation was still under control due to no fluctuation in the demand of electricity.

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