Coal India Ltd. (CIL) has been able to achieve “import substitution” of 90 million metric tons (mt) during fiscal year 2020-2021.

CIL officials said that owing to aggressive marketing initiatives and offering customer-friendly schemes, the miner was able to offer higher volumes to bulk consumers to the extent of 90 million tons, which otherwise would have been imported by consumers.

The biggest contributors toward replacing imports was CIL being successful in increasing offerings through e-auction, selling 124 million mt through competitive bidding by bulk consumers, 17% higher than coal put up for e-auction during the previous fiscal year of 2019-2020, officials said.

Normally, large consumers like thermal power operators secure dry fuel supplies from CIL though long-term fuel supply agreements (FSAs), which have both floor and ceiling limits to the extent of volume that could be supplied to end users. These FSAs have been amended to include annual contracts where CIL offered commitments to meet 100% of fuel required against earlier assured supplies of 90% of what is stipulated in the FSAs.

It was pointed out that in October 2020, CIL has opened up a facility under which the latter signed Memorandum of Understandings (MoUs) with thermal power plants based on imported coal committing to make supplies of domestic coal equivalent to their normative requirement of imported coal.

According to the government, as two consecutive months of decline on thermal coal imports during January-February, surged 24%, month-by-month basis, at 12 million mt, with highest volumes of around 7 million tons imported from Indonesia. Figures for April, the first month of the current fiscal year, were not readily available, but the government estimated import growth to be around 8%.

However, Indian coal demand and imports are expected to take a big hit during April-June 2021-2022, and even in subsequent quarters as it was hit by the second wave of the pandemic and emerged as the worst affected country in the world.

India has been reporting more than 300,000 COVID-19 cases for nine consecutive days and more than 3,000 deaths daily since April 27.

It is forecast that coal demand during the second wave, May-June, was expected to be impacted by at least 15% lower than April.