Almost all power plants buying fuel from Coal India subsidiary, Central Coalfields, are refusing to accept supplies and have stopped making payments, it said in a statement issued on March 22.
Despite, receiving no payments, the subsidiary has been pushing coal to consumers to meet annual commitment of sales, production and profit.
According to the statement, most of its power sector consumers have started regulating coal receipt by filing lesser or no rail movement programs at all.
Following increased production and supplies from the subsidiary, fuel stocks at most these plants are adequate for 35-40 days, one of the highest ever, prompting them to regulate receipt of the dry fuel.
This has resulted in, stocks at Central Coalfields, which came down to lowest level of 3.1 million tonnes in October last year, to rise to more than 10 million tonnes at present, one of the highest.
In order to ease stocks at its pits, the subsidiary is making efforts to maximize dispatch.
"Number of railway rakes dispatched by Central Coalfields on a daily basis has touched a new high," the company said in the statement.
The subsidiary has been making all-out effort to liquidate coal stocks in order to increase production. All pending and current allotments to the non-power consumers have been liquidated till January 2020. The sector consumes 20% of subsidiary's production.
To tide over the present situation of poor demand, Central Coalfields held a series of auctions during recent months, however, response from consumers were very tepid because of saturation in the market.
"These testing circumstances are adversely affecting both production & off-take of the subsidiary resulting in a state where the company is finding it difficult to reach even the annual commitment of dispatch and in turn coal production," Central Coalfields said in its statement.
(Writing by Becky Du Editing by Harry Huo)
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