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Coal India's Small Consumers Can Also Choose Preferred Mines



November 6, 2018 - Small and medium consumers of Coal India now have the option of choosing their preferred coal mines. They can also carry coal either on trucks to destinations or through a combination of rail and road and save on logistics. 

Last week, the Coal India board cleared a proposal that will now allow consumers requiring a minimum of 2.5 lakh tonnes of coal a year to choose their coal mine. 

Earlier, the threshold for choosing specific mines was given to consumers with a minimum requirement of one million tonnes a year. Additionally, the source mine was to have a minimum production capacity of 2.5 mtpa. 

At the last board meeting, the threshold of one million tonnes has been reduced to 2.5 lakh tonnes a year while the production capacity for eligible mines has been reduced to 1 million tonnes a year. This is expected to bring a larger number of mines under the scheme. 

“The mine specific coal supply policy was conceived in 2011 to enable consumers benefit from assured supply from a preferred source and gain from reduction in logistic expenses. Now, with Coal India board clearing the decks, the policy norms have been relaxed considerably to accommodate greater number of consumers under the ambit of the policy,” a senior Coal India executive said. 


“This change would help consumers with smaller quantities of coal requirement,” said the executive. This was done as the market dynamics, profile of consumers and mines vary from one subsidiary of Coal India to another. It was felt there was a need for a flexible mechanism to enable coal companies cover larger number of mines and bring additional consumers under the fold of the scheme.