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Coal India Takes Emergency Steps To Tackle Power Crisis

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Coal India is rushing to supply coal it has sourced from railway sidings, loading areas and other places over the years to feed power plants critically short of the fuel, a company official with knowledge of the matter said.

The move is part of emergency measures taken by the state giant to prevent a shutdown of nearly one third of India's thermal power plants that have coal stocks of less than four days - a situation last seen in one of the worst blackouts in 2012. A few power firms have already switched off some units.

Adding to power companies' concerns is a warning by Coal India unions to go on a three-day "work to rule" this month demanding the return of coal blocks allocated by the government mainly to private firms and declared illegal by the Supreme Court last month.

The "work-to-rule" strike would mean a limited number of miners will attend work with minimum disruption to daily activities. However, it would still aggravate an already severe shortage of the fuel in the country.

More than half of India's thermal power plants, which source most of their coal from state behemoth Coal India, have stocks enough to last for only less than a week.

Coal India said in a statement that five unions representing more than 350,000 workers of the world's largest coal producer will resort to "work to rule" from Sept. 18.

They want the government to allocate to Coal India the 218 coal blocks awarded mostly to private firms over the past two decades and ruled illegal by the Supreme Court last month.

The top court is expected to decide on the 218 blocks in a hearing on Tuesday. Confusion surrounding the blocks awarded over the past two decades has meant only a handful of them are producing, making India rely heavily on imports.

Coal India, which accounts for more than 80 per cent of India's total production, has about 30 million tonnes of accumulated "carpet coal" that is being sent to companies on a priority basis, said the official who declined to be named as he is not authorised to talk to media.

"We have requested our units to push this coal from stock to power stations which are in a critical condition," said the official. "Where critical or super critical power stations are there, we have already advised our subsidiaries to enhance their off-take so that they come out of critical condition."

The company has also advised power firms to use trucks to carry coal from remote mines, like the Amrapali open cast pit in Jharkhand.

India's railway network is often clogged, delaying delivery to power stations.

India suffered unprecedented power cuts on July 30-31, 2012, that affected 620 million people - nearly a tenth of the world's population - in 22 states across the north and east of India.

Heavy rains in eastern India has also hurt coal mining, with output falling to 1 million tonnes per day over the past week from an average of 1.3 million.

The production loss and a lack sufficient transport infrastructure could result in the company falling short by 30 million tonnes of its targeted coal supply to the power sector. It had planned to supply 408 million tonnes for the year through March 31, the official said.

This will result in a further increase in inbound shipments to the country, already the third largest importer of coal.

Selling Coal Through e-auctions To Be Halved
Amid acute shortage of coal for power sector, Coal India has accepted the government's request for drastically reducing its e-auctions to almost half.

"Accepting government's request, Coal India has decided to drastically reduce the coal sold through e-auctions to various players in the country," Coal Minister Piyush Goyal said on 3 September.

A total of 58 million tonnes (MT) of coal was sold by Coal India Limited (CIL) through e-auctions in 2013-14 and the government had asked it to cut its sale to 25 MT this financial year to make more coal available for the fuel- starved power sector.

Sources said CIL, the single largest coal producer in the world, has already sold 14 million tonnes of coal during the first three months of the current fiscal and thus will reduce its sale through e-auctions gradually.

There were reports of differences between Coal Ministry and CIL over the former's "request" of a cut in e-auction sales by the state-owned miner and the matter had also reached the Prime Minister's Office (PMO) which had asked for assessing its losses due to the e-auctions cut.

The sources said that CIL after agreeing to Coal Ministry's request will carry out e-auction sale of 30 million tonnes of coal this financial year.

CIL sells about seven per cent of its output through e-auctions and smaller users including power companies and non-power users buy coal through this route.

CIL, which accounts for 80 per cent of domestic coal production, produced 462 million tonnes of coal during 2013- 14, against 452.5 million tonnes in 2012-13.