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Coal India is planning to offer its e-auction buyers an option to lift the purchased coal any time in the next three years. According to the company, the move will not only increase sales but also cut inventory costs of its customers.
For now, the option will be offered only to power firms. Last year, the company had allowed customers to lift coal within six months of the date of purchase.
“In view of the excellent response to this option, we have decided it to extend it beyond a year. It is expected to help book larger volumes of coal, as users would have the option of lifting it whenever they need it, thereby saving on inventory costs,” said a senior executive from Coal India.
The company is currently working out the amount of coal it will offer for such sales and is in discussion with its subsidiaries. Some power producers are said to be flush with coal because they have supply contracts with Coal India, while others that set up an estimated 31 gigawatts of capacity after 2009 are fuel starved.
On the other hand, some power plants with about 5,650-mw capacity neither have coal nor power-supply contract with a distribution company, while others with about 9,316-mw capacity have coal-supply contracts but do not have power-supply agreements.
Additionally, plants with a total capacity of 2,940 mw have a letter of coal-supply assurance from Coal India and have managed to sign power purchase agreements, but they have not been receiving coal from CIL. These plants could receive coal through long-term e-auctions.
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