Western Coalfields offers to supply coal to power plants of Coal India’s other arms

KOLKATA: Western Coalfields has offered four million tonnes of coal to power plants currently supplied by Coal India’s other subsidiaries. Customers can shift their existing sale contracts to Western Coalfields, the company said in a notice.

Many of its customers had shifted to mines that were further away as Western Coalfields’ output fell. However, with output rising again, it has made the offer under its ‘mine specific policy’, which charges a ‘small premium’ while power generators in central, west, or south India can make substantial savings on transport due to proximity to its mines.

According to Western Coalfields, Mahagenco, one of its major customers, saved an average Rs 1,200 per tonne on freight in recent years. It has estimated Mahagenco’s fuel requirement during 2020-21 at 35 million tonnes and has already submitted proposals for supplying the full quantity.

State-owned generation companies of Maharashtra (Mahagenco), Madhya Pradesh (MPPGCL), Gujrat (GSECL) and Karnataka (KPCL) along with other private power producers were largely dependent on Western Coalfields for their coal requirement.

“Due to larger distances, these consumers had to pay more on railway freight, making the landed cost of coal higher,” the company said in a recent statement.

The company invested in land acquisition and rehabilitation of affected people. It commissioned 20 new projects, which contributed 35.8 million tonnes during 2019-20. To meet additional demand from power consumers, it dedicated 11 mines for them.

It plans to ramp up production from 57.6 million tonnes in 2019-20 to 75 million tonnes in 2023-24 and further to 100 million tonnes by 2027-28 to meet the entire fuel requirements of its power consumers in central, west, and south India from the current year onwards.

“With substantial growth in coal production over the last five years, Western Coalfields… has been able to provide cheaper landed price coal to state and private power generation companies of central, west and south India. This effort has helped power plants in reducing power cost, which will lead to cheaper power to its consumers,” the company said.