CIL may have to import coal, says incoming CMD

Coal India Ltd, the world's largest producer of the fuel, may have to import coal to meet its obligations to electricity producers after the government mandated that it must sign agreements with power companies for supplying a minimum assured quantity of coal, S Narsing Rao, who has been designated as the next chairman and managing director of CIL, said on Friday.

"We have to see how much we can step up production to meet the commitment. CIL will do the imports if it is inevitable," Rao, who is currently heading state-run Singareni Collieries, said. CIL earlier had expressed inability to import, saying it was not in the business of importing coal.

''With a production target of 464 million tonnes this financial year, output is unlikely to meet the demand. We may have to go for imports,'' Rao told sections of the media.

Just two months back, CIL had ruled out directly importing coal, saying that was not its business. But the new government directive to ensure that CIL meets at least 80 per cent of power producers' demand has changed the tune.

Experts never doubted that CIL would have to reverse its policy of not dirtying its hands with imported coal if it was to meet the latest diktat; as both state-run and private power producers are battling with a perennial fuel shortage.

The state-run monopoly supplies 80 per cent of the coal consumed in India; but amid poor management and short-sighted government policy, it has never come close to meeting the demand. This is the more so today, with the economy growing rapidly and the demand for fuel alongside.