Coal news and updates

CIL cancels LoAs for 104 industrial units till July

November 1: Coal India Ltd (CIL) has cancelled the Letter of Assurance (LoA) issued to 104 industrial units for non-submission of required documents till July 31, 2013, according to data available with ICMW.

Of these, 67 units suffered complete withdrawal of LoA, while 35 units saw partial withdrawal of the LoAs by CIL, data showed.

The withdrawal would result in the stoppage of 24.240 million tons (mt) of coal supply to the affected units per annum.

Of the 104 units, the highest number of units, at 69, belonged to the captive power producer (CPP) segment. Another 8 units belonged to the power utility sector, 6 to the cement industry and 19 to sponge iron.

The reasons for the withdrawal of the LoAs included non-submission of commitment guarantees (CG) and/or milestones.

As per the data, the total number of units authorised for issuance of LoA (to which notices for CG were issued) was 698 and the total quantity for which CG was to be submitted was 509.368 mt. These include 179 power utilities (429.536 mt), 50 cement units (9.326 mt), 237 CPPs (53.812 mt) and 232 sponge iron units (16.694 mt).

Of these 698 units, 593 have submitted the CG and been issued LoAs involving a total quantity of 492.161 mtpa. Also, 593 units submitted milestones of which 428 have had their milestones completely verified. However, documents submitted by 94 units were found to be incomplete (the consumers were informed accordingly), while documents submitted by 71 units were under verification as of July 31, 2013.

As for the status of the fuel supply agreement (FSA), the data showed that till July 31, 2013, CIL had concluded the FSAs with 372 units, involving a total quantity of 172.445 mtpa. The FSAs for another 56 units were ready for processing. This data included both pre and post NCDP LT and LoA commitments.

Of the 372 units, power utilities comprised 65 (involving a quantity of 132.183 mt), cement plants were at 17 (2.185 mt), CPPs were 109 (25.814 mt) and sponge iron, 181 (12.263 mt), the data showed.