CIL-NTPC quality issue: Crushing the inferior coal
Amarpali coal mine of Central Coalfields, a subsidiary of Coal India Ltd, in Jharkhand. (Express file photo) Amarpali coal mine of Central Coalfields, a subsidiary of Coal India Ltd, in Jharkhand. (Express file photo)
In April 2013, a dispute between India’s largest coal producer Coal India Limited (CIL) and the country’s largest power producer NTPC Ltd on the issue of quality of coal being supplied had aggravated to such a level that the Central government had to step in and ask both the parties to jointly test a coal sample every time before its dispatch to the power plant. In subsequent years, the quality of coal supplied has gradually become better for NTPC Ltd. This is evident from the fact that the quantity of stones and boulders received in coal supply during 2016-17 was 53 per cent less than what was received during 2015-16.
“Incidences of inferior coal quality have come down… CIL vide letter dated February 4, 2016, has committed to supply (-) 100 mm crushed coal. CIL has taken action regarding installation of crushers at most of the mines… As seen from the data, the instances of stones have reduced in 2016-17 vis-a-vis 2015-16,” NTPC Ltd told The Indian Express in response to an application filed under the Right to Information (RTI) Act, 2005. The data provided by the NTPC show that the quantity of stones and boulders received in the coal supply during 2015-16 was 93,538 tonnes, which reduced to 43,715 tonnes in 2016-17.
NTPC Ltd also said that the Coal Controller’s Organisation (CCO), which works under the coal ministry, regularly takes action as per the feedback it receives from the power producer. “In (the) case of consistent quality deterioration, complaints are also lodged by power stations with the CCO regarding mines… CCO, in September 2016, downgraded 19 number of mines. Further, in April 2017, CCO degraded around 355 mines/dispatch points of the CIL mines,” NTPC Ltd added. According to the fuel supply agreements (FSAs), CIL has to calculate its coal bill as per the mine’s grade, which is decided by the CCO.
According to NTPC Ltd, currently, coal is sampled and tested at the dispatch point for gross calorific value (GCV),
moisture as well as ash. This sampling and testing is done by Third Party Sampling Agency, also known as the TPA. Whenever the coal is received by NTPC Ltd’s power station, it is inspected for “boulders” and “stones”. In 2016-17, CIL supplied around 90 per cent of the total coal requirement of NTPC Ltd, which stood at 161.4 million tonnes.
CIL has a near monopoly in the Indian coal production market.
As per the FSA provisions, NTPC Ltd must inform CIL about all incidents of presence of stones and boulders “immediately on its detection at the delivery point and/or unloading point”. According to the power producer, “The stones segregated by the company at the power station shall be assessed jointly for adjustments, as per the FSA”. In 2015-16, the amount that was adjusted (or deducted) from the coal bill was Rs 10.54 crore as it had received 93,538 tonnes of stones and boulders. In 2016-17, the NTPC decided to deduct Rs 5.79 crore from the coal bill as it had received 43,715 tonnes of stones and boulders. In the RTI response, NTPC Ltd said that the volume and value of stone adjusted “is subject to financial reconciliation with the concerned CIL subsidiary”.
Even though the quality is getting better, NTPC Ltd expects CIL to take more steps to improve the situation further. During 2016-17, NTPC Ltd sent many letters to CIL — in many such letters, the former attached the photographs of
oversized coal or stones and boulders received from the latter. NTPC Ltd wrote one such letter to Mahanadi Coalfields Limited (MCL) — one of the seven main subsidiaries of the CIL — on March 16 this year.
The March 16 letter was written by NTPC Ltd as its Talcher Kaniha power station had been receiving low-quality and inadequate amount of coal from MCL. In its letter, NTPC Ltd told MCL that its station has been “getting low GCV coal on continuous basis”, leading to “increase in sp. (specific) coal consumption to around 0.95” and it is “putting heavy stress on equipment”. NTPC Ltd observed that “old stock of LOCP” is being “mixed to meet the quantity requirement and KOCP is not able to give their full production to Talcher Kaniha”.
The letter also talked about the boulders and stones in coal supplies. “The poor quality coal problem is further compounded due to receipt of boulders, delaying the unloading and release of rakes, affecting coal receipt and leading to demurrage charges. Some photographs showing receipt of boulders during this month are enclosed herewith. It is pertinent to mention that during visit of our official at KOCP siding on March 9, 2017, lots of boulders and stones were also found in the Wharfwall 1 and 2 (photographs enclosed),” NTPC Ltd stated.
NTPC Ltd also told MCL as to how the low-quality coal is leading to more consumption of coal to produce same amount of power, resulting in lower coal stocks at the Talcher Kaniha. “Due to low GCV coal, average coal consumption has increased to 56,000-60,000 metric tonnes per day. Further, at existing level of supplies, the coal stock has gone down to 3.50 lakh metric tonnes (six days stock at average consumption basis). To build up the coal stock to 14 days, coal supply is required at 70,000-75,000 metric tonnes per day. Your kind intervention is solicited in ensuring better quality sized coal at 70,000-75,000 metric tonnes per day,” said NTPC Ltd in the letter. Many such letters were sent to the CIL in 2016-17.
In April 2013, the then chairman and managing director (CMD) of NTPC Ltd, Arup Roy Choudhury, stated that “they (CIL) are giving us poor quality coal… we don’t want it,” adding that the quality of coal NTPC receives is “extremely” poor and sometimes “it is full of stones, boulders and dirt”. Compared to 2013, today’s situation is better for the company. However, looking at various letters sent by NTPC Ltd to CIL in 2016-17, it is clear that the latter would still need to take many more steps to address the former’s concern over coal quality.
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