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Govt to set-up specialist quality control monitors for imported coal

17 May 2013 Evaluate

Amid uproar over the poor quality of imported coal, the government is planning calling in specialist quality control monitors to prevent poor quality coal imports getting through to its import-reliant power plants. Poor quality coal reduces the efficiency of power stations, requiring more fuel and an increased need for the costly disposal of pollution.

Earlier last month, NTPC, India’s largest utility, viewing coal as substandard, refused to pay, prompting Coal India to respond by suspending supplies and raising concerns of blackouts. Pursuant to which, the government is planning a tender for independent coal quality sampling by September, in which international verification companies like SGS and Bureau Veritas are taking part.

With domestic coal production lagging demand, Indian utilities have become increasingly dependent on imported coal; however the quality of many of these imports is dropping. Low quality coal exports from Indonesia, the world's biggest exporter of thermal coal have risen progressively in the past 5 years, mainly to China and India. Moreover, similar move is also expected to be followed by China, which in order to reduce pollution and help domestic producers may soon ban lower quality imports.

Further, on the part of Indian utilities as the imported coal costs around 50% more, they are facing huge losses unless they raise power customer prices, something which the state governments are refusing to accept.

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