The Coal Logistics Policy, 2022 gives ample impetus on the implementation of environmental-friendly transport systems which includes cross country pipe conveyors. It has been observed that the biggest challenge to successfully install & operate such systems is to have long-term coal linkages from the connected mines of CIL.
The Ministry of Coal has encouraged the industry and power utilities to come forward and install Conveyor Belts up to 20 km to source coal from the mines with a view to discourage road transportation and to reduce burden on the railways. This is a welcome step to invite industry to create such environmental-friendly systems but there has been absence of policy to allocate coal on long-term basis from the identified sources.
It is estimated that 20 km long cross-country pipe conveyor would be requiring an investment of about INR 1000 crore to carry about 15 mnt/year of coal. Until and unless, CIL ensures a long-term linkage to justify such investment, the investor will also experience hardships in getting funding from the banks.
Earlier the linkages to the power sector were granted through the Standing Linkage Committee (LT) followed by signing of LOA based Fuel Supply Agreements. This system has now faded away & shifted towards SHAKTI scheme of allocation of coal through E-Auction mode. Similarly, the coal linkages for Non-Power Sector are being granted through e-Auction mode for a 5-year term only.
These e-Auctions are mine specific with variety of grades which results into multiple linkages for any plant with multiple sources & grades of coal. Under these circumstances, it is becoming impossible to install a dedicated conveyor system for a mine until & unless CIL bundled multiple linkages into one and allots only from one mine. To enable this, there has to be a change in the current Coal Distribution Policy.
It is important to review the current policy of coal allocation so that long-term linkages are granted to the interested parties with an incentive like preferential allocation of coal.
First mile connectivity
It has been seen that many existing projects of medium to large size are not connected with Indian railways and truck transport has to be resorted to as the easiest alternative which leads to unsafe, environmentally hazardous movement and promote corrupt practices.
Logistics availability and co-ordination in offtake arrangements for coal through railways needs dedicated private lines to be built in areas where future mining capacity will come up. The Indian Railways continues to be resource constrained hence private investment through either a build-own-operate or a build-own-operate-transfer model in addition to customer-owned merry-go-round systems may be looked at for speedy execution of projects to ensure logistical connectivity.
CIL has to quickly identify such areas where first mile connectivity can be provided expeditiously.
Increasing train loads should be one of the priorities. Internationally, there are examples to carry loads up to 90,000tonnes per train with longer trains. This can be achieved by increasing wagon capacity and length of rake. First trial in India, was made on 15th August 2022 with a 3.5 km long freight train, Super Vasuki, with 295 loaded wagons carrying over 27,000 tonnes of coal between Korba in Chhattisgarh and Rajnandgaon. More such trials can be made with an objective to increase train loads for the coal movement. Matching mechanised loading and unloading capacities should be available for such rakes to reduce turnaround time.
(To be continued… This article, the second in a 3-part series, attempts to unlock India’s coal logistics dynamics)
By KAPIL DHAGAT
The author is Executive Vice President and Head BU Coal Jindal Steel & Power Limited (JSPL)
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