CIL plans power plants, seeks more wagons to reduce stockpile

01 Sep 2010

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State-owned Coal India Ltd (CIL), the world's largest coal producer, said it may consider setting up power plants in the country to help reduce its growing stockpile of the fuel.

"We may set up power plants if stockpiles keep on rising. Currently, the stockpile stands at 53 million tonnes," CIL chairman P S Bhattacharyya told reporters on the sidelines of a coal summit organised by Mjunction Services, a 50:50 joint venture JV between Tata Steel and Steel Authority of India Ltd for e-commerce.

Coal India, which is going to launch its initial public offering in the second half of October, is already in pact with state-owned National Thermal Power Corp (NTPC) to set up two 2,000 mw power plants in Jharkhand.

The company is trying to arrange more rail wagons to transport coal and reduce the state-run company's stockpile by 24 per cent before the end of March from the level at the beginning of the fiscal year in April. "The inventory is rising mainly due to shortage of railway wagons," Bhattacharyya said. Coal India generally needs 205-210 wagons a day. But it had previously said that on an average it was getting merely 170 wagons a day.

India's coal production is expected to rise over the next few years and, since it will still be short of demand, the country is expected to increase imports as well. However, a shortage of rail wagons and other transportation facilities is hurting movement of the commodity from mining sites and ports.

Coal India's stockpile has been increasing every year as evacuation capacity and production aren't synchronised, Bhattacharya said. "Railway resources are falling short and we are completely dependent on rails and wagons for transportation."

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