Steel 360 has learnt about issues related to supply of inferior quality of Coal from SECL.
Supply of poor quality of Coal leads to reduced production of clinker and lower power generation by Calcium Pyrophosphate (CPP) which in turn leads to an increase in cost of cement production.
Coal is considered to be of low quality when it has a high content of ash, moisture or sulfur. Such Coals usually have a heating power below 16 MJ/kg (3822 kcal/kg). In cement manufacturing, Clinker is lumps or nodules, usually 3–25 mm in diameter, produced by sintering limestone and alumino-silicate (clay) during the cement furnace stage.
It was given to understand by the Cement Manufacturers Association (CMA) that its associated member companies have been consistently expressing serious concern about poor quality of coal supplied by South Eastern Coalfields (SECL). Extensive variation in billed gross calorific value (GCV) and actual GCV is also being observed.
Moreover, day-to-day quality of Coal supplied from SECL mines is declining and variation in actual & stated grade is also recorded from 1 to 4 grades in Coal consignments received by member cement companies.
Third party is an agency that collects, prepares and analyzes Coal samples at loading points.
Third party sampling of Coal has been introduced with effect from 1 Oct, 2013, for power utilities and other consumers having Agreed Contractual Quantity (ACQ) equal to 0.4 MnT or above. CIL has modified its Fuel Supply Agreement (FSA) to allow third party to collect samples at the delivery point for determining quality of the material. Samples of Coal is collected in presence of representatives of the seller & the purchaser.
Cement industry is suffering seriously due to segregation & diversion of good quality Coal to e-auction and power generation companies. Further, with the implementation of third party sampling, cement industry is supplied with leftover coal, which is not covered in third party sampling.
It is also observed that cement sector is supplied coal at non regulated price which is 35 per cent more than notified price of G5 to G17 grade supplied to power utilities. In addition to this, quantity of coal supplied to cement plants is 25 per cent less than the ACQ quantity offered in the FSA, other than transit losses up to 7 per cent.
CMA plays a prominent role in representing the Cement industry to the Government and in coordinating the various activities in respect of formulation of Government policies for the cement industry through continuous dialogues and interactions.
CMA has recommended following measures concerned to aforementioned issues.
- Investigation into the regular slippage of 1 to 4 grade of coal supplied from sidings such as Robertson, Burhar, Gevra and N/Kusmuda.
- Extend the facility of third party sampling mechanism to non-power consumers also including cement sector without any constraint of 0.4 MnT, subject to individual option of the consumers of cement industry at par with power utilities and other industries having ACQ 0.4 MnT or above.