Coal India approves 80 percent trigger point for supplies

July 31st, 2012 - 10:53 pm ICT by IANS  

Kolkata, July 31 (IANS) The board of Coal India Ltd (CIL), the world’s largest coal miner, Tuesday approved supplying coal to a minimum 80 percent of contracted fuel to power plants, but remained inconclusive on a penalty clause.

“Trigger point remains at 80 percent. There are changes in the penalty, we have proposed different penalty regions,” Coal India chairman S. Narsing Rao told reporters after a board meet here.

The Board reached a consensus to supply 65 percent of the requirement of power companies through domestic production and meeting the shortfall of 15 percent through imports.

For that the state-run firm will import 18 million tonnes to 20 million tonnes of coal in this financial year.

According to Rao, the CIL was revising the penalty clause for not meeting the trigger point of the Fuel Supply Agreement (FSA) with power firms.

“Penalty clause (remained) inconclusive….we are working on that,” he said.

He said the board would meet soon to decide on the penalty.

Earlier, the penalty was fixed at just 0.01 percent of the value of the shortfall.

Rao said the board broadly agreed to pool imported coal price with domestic coal.

Price pooling means common pricing of similar grade coal, which is arrived at by taking the average prices of imported and domestic coal.

“The import is practical, when there is price pooling,” Rao observed.

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