NTPC floats tender for importing 4 million tonnes of coal - Move to bridge shortfall in domestic supplies…

• NTPC Ltd has floated a tender on Monday for importing 4 million tonnes of coal to bridge the shortfall of the fuel from domestic sources. The country's biggest power producer has decided to import the coal directly, rather than depend on designated trading agencies, to cut down on delays. Coming at a time when the rupee has weakened sharply against the dollar, higher coal imports by NTPC could spell bad news for consumers as the move could impact power tariffs. NTPC consumes around 164 million tonnes of coal a year to fire over two-thirds of its installed generation capacity of around 35,000 MW.

• The imported coal is to be used across 14 of the power major's thermal stations in the coming months. NTPC is already in a pact to import around 12 million tonnes of coal through State Trading Corporation. The new tender, along with the STC contract, would make up the company's coal import target of 16 million tonnes set for the current fiscal.

• In the coming future, NTPC is looking at striking long-term contracts spanning 25 years for sourcing 10-15 million tonnes to ensure steady supplies and lower price volatility. NTPC' s average imported coal blending during 2010-11 was close to 8 per cent in comparison to about 6.5 per cent in the previous year. This could be much higher this year, as the domestic coal shortage is only getting worse and imports are surging. In the long-term, the state-owned power utility aims to meet about 20 per cent of its coal needs through captive mines by 2017. The Centre has allotted seven mines to NTPC, including two blocks to be developed through joint ventures.