Indian coal company relaxes coal supply oversight measures
Indian coal company executives said that with the credit system, non-regulated users from steel, sponge iron, cement, aluminum, small and medium-sized enterprises and independent power producers can buy coal without having to pay a 100% advance payment, thus making these The company was able to run the power plant smoothly.
"The Indian Coal Corporation is expanding the coverage of letters of credit to non-regulated users, allowing them to purchase coal for rail transportation through an irrevocable revolving letter of credit (IRLC) model under the premise of a coal supply agreement (FSA) in accordance with the joint auction rules. "The Indian Coal Corporation said in a statement. The executive said that the system is currently only extended to power companies and said the government aims to streamline operations in the coal industry through the move.
Indian Coal Corporation said that the number of users in non-regulated industries is huge, and recently it has been found that the liquidity of coal transported by rail has been limited, which has affected the business situation of enterprises. The company said that previously, these customers' large deposits of coal for rail transport were “locked in advance”.
In the 2018-19 fiscal year (April 2018-March 2019), according to the coal supply agreement, the company supplied a total of 73 million tons of coal to non-regulated industries, while the company's total coal sales were 608 million tons. In another plan, Indian Coal Corporation allows independent power producers to transport coal between power plants. This means that if an independent power company has two different power plants and two separate coal supply agreements, coal can be transported from one power plant to another, thereby increasing power generation efficiency and reducing raw material costs.
Indian Coal said that initially, the system was limited to central and state power companies. The company added that the system will also reduce transportation costs and reduce rail transport burdens during peak periods.