New Delhi: Coal India Ltd (CIL) which accounts for over 80 percent of the domestic coal production, has decided to increase the tenure of fuel supply pacts to be signed with the steel industry.
According to a notice published by CIL, the pact will be signed for a period of 10 years with a view of reducing the sector’s reliance on imports for the fuel.
Coal India in a notice to its subsidiaries mentioned that the new FSA tenure would be applicable from the fourth tranche of an auction of coking coal linkages for the steel sector to be held shortly,
“In view of substantial investment required for setting up of coal washing capacity by the consumer and with the aim to reduce dependence of steel sector on imported coal further, the tenure of steel sector linkage auction FSA has now been increased to 10 years, which would be mutually extendable by another five years,” Coal India Ltd (CIL) said in the notice.
The Cabinet Committee on Economic Affairs had earlier approved the allocation of coal linkages for the non-regulated sector, including cement, steel/sponge iron, aluminum and others (excluding fertilizers and urea), only through auction.
Prior to this decision, the Standing Linkage Committee had been deciding on the allocation of long-term and short-term linkages for the sectors, including power and steel.