Lok Sabha Question No. 2387 (UNSTARRED), answered on 2022-12-21
Subject: Coal Permit to Industries
Ministry: COAL
Asked by: Gopal Chinayya Shetty

## GOVERNMENT OF INDIA MINISTRY OF COAL

## LOK SABHA UNSTARRED QUESTION NO. 2387 TO BE ANSWERED ON 21/12/2022

## Coal Permit to Industries

## 2387. SHRI GOPAL CHINNAYA SHETTY:

Will the Minister of COAL be pleased to state:

- (a) the details of the guidelines and the terms and conditions fixed by the Union Government for granting permit to public and private industries and organisations;
- (b) the details of the per metric tonne rate fixed for the coal extracted during this financial year so far;
- (c) the details of complaints/information received regarding the coal permits issued by violating the guidelines and the terms and conditions as on date, company-wise; and
- (d) the action taken in this regard so far?

## ANSWER

## MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES (SHRI PRALHAD JOSHI)

(a): There is no system in vogue for issuing coal permits. Earlier such consumers used to get coal through fuel supply agreements executed in term of New Coal Distribution Policy 2007. Coal linkages are now being granted to Government and private industries falling under the category of non-regulated sector consumer through 'Linkage Auction Policy for Non - regulated sector dated 15.02.2016'. The mechanism of coal supplies to various customers is as under:

Supply  of  coal  to  Thermal  Power  Plants,  NRS  and  State  Nominated  Agency was  earlier governed  by  New  Coal  Distribution  Policy,  2007  (NCDP).    The  mechanism  of  coal  supplies prescribed in NCDP was by way of coal linkages through enforceable Letter of Assurances (LoA) / Fuel Supply Agreements (FSAs) as well as e-auctions.  Thereafter, the provisions of coal linkages of  the  NCDP  for  Power  Sector  and  the  Non-Regulated  Sector  has  been  replaced  by  the  new mechanisms of SHAKTI Policy in 2017 and Auction of coal linkages for Non-Regulated Sector (NRS) in 2016 respectively.

Non-Regulated Sector: The policy on Auction of Coal Linkages to Non-Regulated Sector (NRS) prescribes that allocation of linkages for Non-Regulated Sector [except Fertilizer (Urea)] shall be auction based. The new FSAs shall be for the maximum period of 15 years. With the amendment to the policy introduced in 2020, the tenure of coking coal linkages in the Non-Regulated Sector linkage auction has been revised for a period upto 30 years.  For auction of coal linkages under the Policy, separate quantities are earmarked for sub-sectors of Non-Regulated Sector.

Power Sector: SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) Policy governs coal linkages to the Power Sector (Coal). The scheme provides various avenues under which the power plants can obtain short, medium & long term coal linkages. The Scheme has provisions for coal linkages on nomination basis to Government Gencos and on auction basis to Independent Power Producers.

Bridge Linkage for Specified end use plants of Central and State PSUs [Both in Power as well as Non-Power sector]: Bridge Linkage acts as a short term linkage to bridge the gap between requirement  of  coal  of  a  specified  end  use  plant  of  Central  and  State  PSUs  and  the  start  of production from the linked allotted coal mine/ block. Bridge Linkage is allocated only against Schedule-III coal mines under CM(SP) Act and coal blocks allotted under MMDR Act.

E-Auction of coal: Coal distribution through e-auction under NCDP was introduced with a view to provide access to coal for such consumers who are not able to source coal through the available institutional mechanism for reasons like the seasonality of coal requirement, limited requirement of coal not warranting long-term linkage. Coal India Limited was earlier conducting e-auctions under different windows meant for Power Sector, NRS and traders.  All the existing e-auction windows of CIL/SCCL have now been clubbed into a single window to remove market distortions and auction of coal shall be done in a mode agnostic manner.

Small,  Medium  &  Other  Sector: The  New  Coal  Distribution  Policy,  2007  (NCDP,  2007), provided for distribution of coal to those units/consumers in small and medium sector across the country whose requirement was less than 4,200 tonnes per annum and were otherwise not having any access to purchase coal or concluded Fuel Supply Agreement (FSA) for coal supply with coal companies. The earmarked coal quantity would be distributed through State Nominated Agencies (SNAs) notified by the State Governments. However, the overall allocation to the SNAs is within the  earmarked  quantity  of  8  MT.  This  provision  of  the  NCDP,  2007  has  been  amended  on 27.09.2016  by  which  the  annual  cap  of  4,200  tonnes  per  annum  for  sale  through  SNAs  has been  increased  to  10,000  tonnes  per  annum  and  the  phrase  of  small  and  medium  sector  as mentioned in NCDP, 2007 has been amended as small, medium and others.

(b): The latest coal prices notified by CIL, SCCL and NLCIL are placed at Annexure-I, II & III respectively.

(c): No report regarding violation of guideline & terms & Condition has been received from CIL, SCCL and NLCIL. However, a representation dated 20.1.2022 was received from a member of Parliamentary Board regarding irregularities in coal distribution by State Nominated Agencies of Gujarat state for the coal allocated by Coal India Limited to the agency.

(d): Consequent to the above representation, the following steps was taken to prevent irregularities in coal distribution by SNAs:

- (i)    Supply of coal to the concerned SNA immediately stopped.

(ii)   State Govt have been advised to nominate only State/Central Government agencies as SNA for distribution of coal to MSME industries.

(iii)   The quantity of all the SNAs revised on the basis of lifting of last five (5) years.

Coal is  allocated  to  the  SNAs  on  the  basis  of  New  Sales  Distribution  policy  issued  by  MOC 31.10.2007,  where  it  was  mandated  that  coal  PSUs  would  allocate  coal  to  State  Nominated Agencies and the SNA will distribute coal in a transparent & scientific manner at a price with a margin up to 5% over and above basic price charged by the coal companies.

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## Annexure-I

## Pit Head run of Mine price (ROM) of non-coking coal applicable for all coal producing subsidiary companies including NEC but excluding WCL.

| Grade   | GCV Range                             | Pithead Run of Mine price for Non-coking coal                | Pithead Run of Mine price for Non-coking coal                            |
|---------|---------------------------------------|--------------------------------------------------------------|--------------------------------------------------------------------------|
|         |                                       | Power Utilities (including IPPs), Fertilizer &Defence Sector | Sector Other than Power Utilities (including IPPs), Fertilizers& Defence |
|         | (Kcal/kg)                             | (Rs/Te)                                                      | (Rs/Te)                                                                  |
| G1      | Exceeding 7000                        | *                                                            | *                                                                        |
| G2      | Exceeding 6700 and not exceeding 7000 | 3298                                                         | 3298                                                                     |
| G3      | Exceeding 6400 and not exceeding 6700 | 3154                                                         | 3154                                                                     |
| G4      | Exceeding 6100 and not exceeding 6400 | 3010                                                         | 3010                                                                     |
| G5      | Exceeding 5800 and not exceeding 6100 | 2747                                                         | 2747                                                                     |
| G6      | Exceeding 5500 and not exceeding 5800 | 2327                                                         | 2534                                                                     |
| G7      | Exceeding 5200 and not exceeding 5500 | 1936                                                         | 2321                                                                     |
| G8      | Exceeding 4900 and not exceeding 5200 | 1475                                                         | 1767                                                                     |
| G9      | Exceeding 4600 and not exceeding 4900 | 1150                                                         | 1378                                                                     |
| G10     | Exceeding 4300 and not exceeding 4600 | 1034                                                         | 1238                                                                     |
| G11     | Exceeding 4000 and not exceeding 4300 | 965                                                          | 1155                                                                     |
| G12     | Exceeding 3700 and not exceeding 4000 | 896                                                          | 1073                                                                     |
| G13     | Exceeding 3400 and not exceeding 3700 | 827                                                          | 990                                                                      |
| G14     | Exceeding 3100 and not exceeding 3400 | 758                                                          | 907                                                                      |
| G15     | Exceeding 2800 and not exceeding 3100 | 600                                                          | 718                                                                      |
| G16     | Exceeding 2500 and not exceeding 2800 | 514                                                          | 614                                                                      |
| G17     | Exceeding 2200 and not exceeding 2500 | 457                                                          | 546                                                                      |

An additional amount ofRs.450.00 per tonne (as per the existing practice) to be charged over and above the notified price in respect of the coal produced from Rajmahal mine of Eastern coalfields Limited.

Table II Pit head run of mine (ROM) price of non-coking coal applicable for WCL.

| Grade   | GCV Range                             | Pithead Run of Mine price for Non-coking coal                | Pithead Run of Mine price for Non-coking coal                            |
|---------|---------------------------------------|--------------------------------------------------------------|--------------------------------------------------------------------------|
|         |                                       | Power Utilities (including IPPs), Fertilizer &Defence Sector | Sector Other than Power Utilities (including IPPs), Fertilizers& Defence |
|         | (Kcal/kg)                             | (Rs/Te)                                                      | (Rs/Te)                                                                  |
| G1      | Exceeding 7000                        | *                                                            | *                                                                        |
| G2      | Exceeding 6700 and not exceeding 7000 | 3298                                                         | 3298                                                                     |
| G3      | Exceeding 6400 and not exceeding 6700 | 3154                                                         | 3154                                                                     |
| G4      | Exceeding 6100 and not exceeding 6400 | 3010                                                         | 3010                                                                     |
| G5      | Exceeding 5800 and not exceeding 6100 | 2747                                                         | 2747                                                                     |
| G6      | Exceeding 5500 and not exceeding 5800 | 2534                                                         | 2590                                                                     |
| G7      | Exceeding 5200 and not exceeding 5500 | 2321                                                         | 2433                                                                     |
| G8      | Exceeding 4900 and not exceeding 5200 | 1767                                                         | 2119                                                                     |
| G9      | Exceeding 4600 and not exceeding 4900 | 1378                                                         | 1652                                                                     |
| G10     | Exceeding 4300 and not exceeding 4600 | 1238                                                         | 1484                                                                     |
| G11     | Exceeding 4000 and not exceeding 4300 | 1155                                                         | 1384                                                                     |
| G12     | Exceeding 3700 and not exceeding 4000 | 1073                                                         | 1285                                                                     |
| G13     | Exceeding 3400 and not exceeding 3700 | 990                                                          | 1186                                                                     |
| G14     | Exceeding 3100 and not exceeding 3400 | 907                                                          | 10 86                                                                    |
| G15     | Exceeding 2800 and not exceeding 3100 | 718                                                          | 860                                                                      |
| G16     | Exceeding 2500 and not exceeding 2800 | 614                                                          | 735                                                                      |
| G17     | Exceeding 2200 and not exceeding 2500 | 546                                                          | 653                                                                      |

Annexure-II The basic grade wise coal prices per metric tonne for SCCL as on date is given below:

| GCV GRADE   | GCV RANGE (Kilo Calories per KG)      |   BASICROM PRICE FOR POWER UTILITIES |   BASICROM PRICE FOR NON-POWER CONSUMERS |
|-------------|---------------------------------------|--------------------------------------|------------------------------------------|
| G1          | Exceeding 7000                        |                                 6110 |                                     6110 |
| G2          | Exceeding 6700 and not exceeding 7000 |                                 5900 |                                     5900 |
| G3          | Exceeding 6400 and not exceeding 6700 |                                 5810 |                                     5810 |
| G4          | Exceeding 6100 and not exceeding 6400 |                                 5760 |                                     5760 |
| G5          | Exceeding 5800 and not exceeding 6100 |                                 5285 |                                     5285 |
| G6          | Exceeding 5500 and not exceeding 5800 |                                 4830 |                                     5130 |
| G7          | Exceeding 5200 and not exceeding 5500 |                                 4430 |                                     4730 |
| G8          | Exceeding 4900 and not exceeding 5200 |                                 3430 |                                     4180 |
| G9          | Exceeding 4600 and not exceeding 4900 |                                 2750 |                                     3820 |
| G10         | Exceeding 4300 and not exceeding 4600 |                                 2610 |                                     3680 |
| G11         | Exceeding 4000 and not exceeding 4300 |                                 2120 |                                     3140 |
| G12         | Exceeding 3700 and not exceeding 4000 |                                 1850 |                                     2780 |
| G13         | Exceeding 3400 and not exceeding 3700 |                                 1480 |                                     2360 |
| G14         | Exceeding 3100 and not exceeding 3400 |                                 1300 |                                     2220 |
| G15         | Exceeding 2800 and not exceeding 3100 |                                 1270 |                                     1620 |
| G16         | Exceeding 2500 and not exceeding 2800 |                                 1220 |                                     1570 |
| G17         | Exceeding 2200 and not exceeding 2500 |                                 1130 |                                     1480 |

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## ANNEXURE-III

## The  details  of  average  base  price  for  coal  extracted  from  NLCIL's  only  operative  coal mine - Talabira II & III coal mine is as below:

:                                        (in Rs. per tonne)

| Particulars                                                                         | F.Y. 2022-23 ( till 30.11.2022)   |
|-------------------------------------------------------------------------------------|-----------------------------------|
| Average base price for the coal supplied to NTPL.                                   | 782.33                            |
| Average base price for coal sold outside after the meeting the requirements of NTPL | 1,191.96                          |

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