India’s NTPC takes coal import holiday

India’s NTPC takes coal import holiday 16TH MAY 2016 BY: AJOY K DAS(miningweekly.com) – Breaking with import dependency over the last decade, India’s largest thermal power producer, NTPC Limited, has decided to take a coal import holiday during the current financial year in response to higher domestic availability and expected production from captive mines. Having received guarantees of assured coal supplies from producer Coal India Limited (CIL), NTPC would not enter into any import contracts during 2016/17, and would receive only a small volume of shipments during the year, which had already been contracted, a company official said. The power utility had initially planned to import 21-million tonnes in 2015/16, which during course of the year was reduced to 16-million tonnes. However, actual shipments were lower at 10-million tonnes, in response to higher dispatches from CIL, the official said. The official added that there was a possibility that the import holiday would be extended for the next few years as captive coal blocks allocated to NTPC were progressively brought into production. The captive coal block of Pakri Barwadhi, in the eastern province of Jharkhand, had already been handed over to mine developer operator (MDO) Thriveni-Sainik and was scheduled for commercial production by the end of 2016. The block was expected to provide assured supplies of 15-million tonnes a year for thermal power plants of NTPC. NTPC was also in the process of appointing an MDO for the Kerandari coal block also in Jharkhand province. This coal block scheduled to be brought into production over the next two years would offer an additional coal supply of about six-million tonnes a year to the power utility. It was pointed out that another trigger for calling a halt to imports was CIL’s decision to offer higher volumes for sales through e-auction during the period August 2016 to March 2017, including forward auctions to enable large coal consumers to plan their feedstock requirements and sourcing over a longer period. CIL had already committed to offer 79-million tonnes of coal during the period for both power and nonpower consumers. Of the total offering, 63-million tonnes had been earmarked for power sector consumers through special forward e-auction and 19-million tonnes to nonpower sector through e-auctions. The volume on offer was significantly higher than the 58-million tonnes of coal sold by CIL during the entire 2015/16.  Officials said that incremental higher sales volumes achieved through e-auction was a win-win situation for the miner and consumers like NTPC. This would enable the miner to secure at least 10% to 15% higher realisations than coal sales at notified prices, while coal would be available on demand for the consumers enabling them to plan their feedstock requirements.