Power sector absorbs more coal while others receive less

Last Updated: Fri, Jul 06, 2012 19:12 hrs

Sectors like cement and other industries in Andhra Pradesh continue to starve on lower coal supplies as most of the coal being produced by Singareni Collieries Company Limited (SCCL) is diverted to the power sector over and above the linkages.

While the capacity additions by the state-owned APGenco and NTPC have put more pressure on coal producers, it has been amplified as supplies from the Mahanadi Coal Fields remained far lower compared to the actual linkages, according to officials. In the first quarter, SCCL supplied 5.1 million tonnes of coal to APGenco which is 171 per cent compared to the proportionate linkage of three million tonnes. Its supplies to the power sector, including NTPC and other power utilities from outside the state, stand at close to 150 per cent compared to the linkage volumes.

During the period, SCCL was able to meet only 81 per cent of the targeted supplies to the cement industry at 1.3 million tonne versus 1.6 million tonne. The coal producer supplied only 2 million tonnes to other sectors, including the sponge iron industry, as against its own target of 3 million tonnes.

The lower supplies to the non-power sectors would mean higher coal costs to the cement, sponge iron and other industries whose requirements have been far higher than the internal supply targets of Singareni and they buy the dry fuel at higher prices from private traders to meet the gap.

“We have been trying to balance the requirements of various sectors by bringing in more production. However, we need to meet the power sector needs on a priority basis,” said Suthirtha Bhattacharya, chairman and managing director of SCCL

Singareni produced 11.66 million tonne of coal in the first three months of the current financial year, which is marginally higher compared to the same period last year. However, with additional stocks on ground, the company was able to supply a total of 13.33 million tonne during the three-month period as compared to 12.92 million tonne in the corresponding quarter last year.

“We continue to focus on deploying modern technology to improve the productivity in underground mines apart from enhancing production in open-cast mines,” he said. “Demand for coal continues to be higher since we did not get relief as expected during the month of June because there were no inflows into reservoirs that have hydel capacities. Therefore, most of the demand, including the shortfall in supplies from the Mahanadi coalfields, had to be met by Singareni,” Prabhakar Rao, director (coal) of APGenco, said. According to Rao, APGenco has received 1.65 million tonne of coal from the Coal India subsidiary as against the proportionate linkage of 2.32 million tonne for the three-month period, with slight improvement over the supplies in the corresponding previous quarter.

“The percentage of satisfaction with regard to the linkage volumes from Mahanadi has gone up by 13 per cent this time around from 57 per cent in the corresponding period last year. We cannot expect more since Coal India categorically said that it cannot meet more than 65-70 per cent of the fuel needs of the existing customers,” he said.

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