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India’s largest coal handling port Paradip has demanded waiver of mandatory storing licence norm for imported mineral cargo, mainly for coking and non-coking coal, amid rising demand and limited evacuation space.
“Mineral imports at Paradip port account for 25 per cent of the total volume of cargo handled. Restrictions in despatch of these materials for want of storage licence and transportation permit are impeding the growth potential of the port,” the port traffic department said in its appeal to the Odisha steel and mines ministry.
As per the Odisha Mineral (Prevention of Theft, Smuggling, and illegal mining and Regulation of Possession, Storage and Transportation (OMPTS) Rules, 2007, all mineral transaction must carry a storage licence and a transport license, to check unauthorised use of the state’s natural resources.
Paradip Port Trust (PPT) authorities said since the imported mineral is obtained from outside the national territory, the OMPTS Rule must not be applied in this case.
“Several lakh tonnes of imported coal and other minerals are held up and not being despatched for want of requisite licence. It is therefore, requested that imported coking coal, non-coking coal and other mineral import may be exempted from OMPTS Rule, 2007,” it said.
The demand to ease restrictions after more than four years of the rule implementation suggests the port’s shift of focus to derive more business from coal import than from iron ore exports, which used to generate higher revenue couple of years ago. During 2011-12, thermal coal imports through Paradip port improved by 50 per cent to six million tonnes, out of total 22 million tonne coal handled by the only major port of Odisha. The import volume of both thermal coal and coking coal is expected to reach about half of the total coal traffic in the current financial year due to higher demand by power industries, port officials said.
The port gets about a fourth of its Rs 400 crore revenue from coal imports. It charges Rs 43 per tonne for coal, almost double of what it charges for iron ore. The unnecessary norm to get a storing license for imported coal is affecting the efficiency of the port operation and the revenue, they said.
“Sometimes we have to refuse or delay coal import orders because of non-availability of space inside the port area. The waiver of the storing license rule will pave way for faster evacuation of coal and more imports,” said a port official.
Many power plants in India have resorted to coal imports after lone supplier Mahanadi Coalfields Ltd (MCL) failed to supply required amount and desired quality coal. The demand for imported coal has also gone up in past couple of months due to drop in prices, after major consumers such as China and the US cut orders amid global economic uncertainty.
Even though Odisha is a significant thermal coal producer, most power producers import low-ash containing Indonesian and Australian coal to blend it with locally-produced high-ash coal for better power generation. Likewise, nearly all sponge iron makers in Odisha and in adjacent states depend upon imported coke to produce the steel intermediate good.