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Coal India claims improvement in grade slippage to 34% in Q3

March 11, 2021 / 09:46 AM IST

Amid rising complaints from states over the quality of coal supplied by Coal India (CIL), the state-run company has said that its grade slippage during the third quarter of the financial year was down to 34 percent compared to 41 percent during the same period last year.

During the first two months of the current fiscal’s fourth quarter, January and February, grade slippages declined further to 23 percent compared to 42 percent of last year’s same period. This comes after NTPC and state governments like Madhya Pradesh, Uttar Pradesh, Andhra Pradesh, Punjab, Haryana, and Telangana writing to the ministry of coal complaining about the quality and quantity of coal supplied by CIL.

Grade slippage is the difference between the proposed coal grade and the actual grade supplied.

CIL said that better quality coal supplies reflected a positive jump in the third party sample analysis as the grade conformity during April to February period improved to 65 percent from 59% percent compared to 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 authorized Third Party Sampling agency, which are the 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,” the company said in a statement.

In a response to the claims by the state government of an annual loss to the tune of Rs 10,000 crore due to quality variation, a company official said none of its customers is suffering from any financial loss due to quality variation.

Contrary to losing out on quality front CIL, till January this year, the company received a quality bonus of Rs 571 crore for providing better coal than the 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, the statement added.

Shine Jacob
first published: Mar 11, 2021 09:46 am