KOLKATA (miningweekly.com) - In a setback to 'coal-reject’-based power plants, the Indian government has ruled out offering any long-term supply linkages as existing coal washeries do not generate a sufficient quantity of low-grade feedstock.

The decision was taken by an interMinisterial committee (IMC) set up by the Coal Ministry to develop a policy for allocation of low-grade coal to washery-reject-based power plants across the country.

This is the second time that the government has turned down the option of allocation of coal rejects to power plants. Earlier this year the government took a similar decision, but after taking charge, the new Indian government decided to revisit the issue as getting reject-coal-based power plants back on the rails was part of the action plan to maximize operations of all thermal generation capacity across the country.

At a meeting of the IMC held on November 7, it concluded that existing washeries of producer Coal India Limited (CIL) generated only 1.3-million tonnes a year of rejects, which was sold through electronic auctions and that the quantity was too small for the miner to enter into long-term supply agreement with coal-reject-based thermal power plants.

The proposal to offer long-term linkage to coal-reject-based thermal power plants could only be considered when CIL completed construction of more washeries and had an assured generation of between 18- to 20-million tonnes a year of rejects, possibly by around 2020, the IMC concluded.

The Power Ministry representatives on the IMC made a strong case for evolving a supply linkage to the six coal-reject-based thermal power plants across the country, which required a total of 500 000 t of washery rejects per year. It was also argued that such an allocation policy would lay down the ground for setting up washery-reject-based thermal power plants in the future.

However, other participants argued that the mandate of the IMC was not to establish coal reject linkage to power plants but, on the contrary, to lay down a framework for disposal of coal rejects generated by miners like CIL and Singareni Collieries Company Limited.

Weighing in against offering linkage was the Environment Ministry which maintained that efficient disposal of coal rejects would entail that only fluidized bed combustion boilers were entitled to receive coal rejects; however, no such norms existed at present.

The government was also cautious to offer linkages given the limited availability of coal rejects, as supply to just a few power plants would raise the hackles of others and the government would be at risk of charges of not ensuring a transparent and nondiscretionary process in allocating such rejects, an official involved with the IMC said.

The IMC, however, concluded that all washery rejects should be classified as per their gross calorific value as determined by the Central Mines Planning and Design Institute Limited, a consultancy wing of CIL, and that the selling price of coal rejects should be benchmarked to such classification.