Coal India may issue first import tender in October
NEW DELHI, Sept 19
NEW DELHI, Sept 19 (Reuters) - Coal India could seek 10-15 million tonnes of coal as early as next month in its first tender, a senior company official said, as the world's biggest coal miner continues to miss its own production targets.
Coal imports, set to hit a record 165 million tonnes in the fiscal year ending March 31, 2014, are worrying the government as one of the top 10 commodities adding to a bulging current account deficit.
Coal India's debut would add as much as 10 percent to that demand and perhaps help support global coal prices which have been under pressure from oversupply, with Indian buyers seeking discounts because of a falling rupee.
Finance Minister P. Chidambaram has said imports should be cut by boosting domestic production, but Coal India's output is not enough for electricity producers struggling to avoid massive power cuts that bedevil Asia's third-largest economy.
"We are looking at between 10-15 million tonnes of coal imports depending on the confirmation and advance payment from the power utilities that have opted for it," said the official, who did not wish to be named.
The miner's likely coal import needs have been steadily rising as it signs more fuel supply agreements (FSAs) with power producers. In August, its needs were around 8 million tonnes.
The state-run miner, which produces more than three-quarters of India's coal, must provide 80 percent of the fuel needs of its power station customers, using imports if its own output falls short. Coal fuels nearly 60 percent of India's power generation.
So far, around 50 buyers spanning private power producers and state-owned utilities such as Damodar Valley Corporation have expressed their interest in imports, the official said.
The tender would be done through public sector trading firms, but the company is yet to finalise which ones.
State Trading Corp, MMTC, PEC and MSTC are among the state-run trading companies that import coal for various power producers and could be used by Coal India.
Coal India is open to sourcing the imports from any country, a company source said last month.
Indonesia accounted for more than 60 percent of India's coal imports in June, followed by Australia and South Africa, data showed last month.
Shipments are not expected until next year, the official said on Thursday. (Reporting by Malini Menon; Editing by Jo Winterbottom and William Hardy)