Coal India (CIL) said coal grade slippage in the third quarter of the ongoing fiscal was down to 34% and clarified that provisional bills of customers later get adjusted once the actual quality of coal is tested. Grade slippage implies that the fuel’s grade during the sampling is found inferior than the declared grade. CIL’s coal is divided into 17 grades. Each grade of coal depending on its heat content is assigned a Gross Calorific Value (GCV). If any reduction is found in the GCV of a particular grade of coal supplied then it is termed as ‘grade slippage’.
The statement comes in the wake of reports saying there were discrepancies in coal quality and the billed amount by Coal India. Grade slippage during the third quarter of FY’21 was down to 34% compared to 41% the same period year ago. The PSU’s underpinning for better quality coal supplies reflected positive jump in the third party sample analysis as the grade conformity during the April-February period improved to 65% from 59%, compared to the year-ago period, it said in a statement.
During first two months of the current fiscal’s fourth quarter (January-February), grade slippages declined further to 23% compared to 42% of in the same period last year. The notion that customers are billed for higher grade coal than one actually supplied is misconceived. CIL initially bills customers based on the declared grade of coal supplied.
Such provisional bills are later adjusted, once the actual quality of coal is tested and established by an authorised third party sampling agency which are Central Institute of Mining & Fuel Research and Quality Council of India. This mutually agreed system of sampling is in vogue since 2016. CIL is further inducting two more globally reputed agencies for its third party sampling initiatives.
“No consumer suffers financial loss arising out of quality variation between the declared grade and the actual tested grade,” the company said.
Contrary to losing out on quality front, CIL till January, stands to receive Rs 571 crore as net quality bonus for providing better coal than declared grade. This is expected to go up to around Rs 660 crore considering the trend of referee results received during the ongoing financial year.
Primary reason for grade variations is the inherent heterogeneous nature of Indian coal itself meaning, calorific value of coal extracted within the same seam at different points tends to vary. The gradation of mines is determined by coal controller’s Office annually which is a statutory body under the Centre, and not by coal companies.
“The analysis between weighted average of declared Gross Calorific Value (GCV) and analysed GCV during April-January’21 shows the variation to be 26 K.cal/Kg which is lesser than one-tenth of a grade band, compared to same period last year. The difference between two bands of a grade is 300 K.Cal/Kg,” it said.
Further, there is a provision in the agreement for challenging the result of the third party sampling either by consumers or the coal company based on the analysis results obtained at their ends. In case of challenge, the part of coal samples preserved is sent to the designated government referee laboratory for re-analysis, as well.
CIL’s use of surface miners entail blast free selective mining leading to better quality coal output with added advantage of consistent sized coal. Surface miner output logged 5.8% growth at 220 million tonnes (MT) during April-February period compared to 208 MT extracted through these machines in the same period last year.
CIL is confident of surpassing last year’s output of 269 MT achieved through surface miners. It is also pushing ahead for utilisation of mechanical scraping to remove extraneous material, use of mobile crushers for supply of sized coal, transportation of coal from mines to loading points in first mile connectivity. In a first, online ash analysers are being procured for the mines of Northern Coalfields Ltd (NCL) and Mahanadi Coalfields Ltd (MCL) for real time coal quality assessment. The slew of measures will further help CIL in consolidating its quality supplies.
