July 15, 2024
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Adani’s bids to supply imported coal to the Indian state have been cancelled

Two state government officials told Reuters that bids for two separate tenders by India’s Adani Enterprises to supply imported coal were cancelled because the prices quoted were too high.

A major government tender for imported coal has been cancelled for the first time in recent years due to high prices. There have been no previous reports on the cancellation.

To address a domestic shortage, India has asked utilities to increase coal imports. Imports, on the other hand, could exacerbate the financial woes of state-owned, debt-ridden power distributors, which owe nearly $15 billion to power generators. According to the officials, Adani, India’s largest coal trader, offered to supply 500,000 tonnes of South African coal at 40,000 rupees ($526.50) per tonne last month and another 750,000 tonnes at 17,480 rupees ($230.08) in January.

Benchmark Following an export ban by Indonesia, South African coal prices began to rise in January, reaching a monthly high of $176.50 per tonne, before reaching a new high of $441.65 per tonne in March due to the Russia-Ukraine conflict. Both tenders were cancelled because the quoted prices were too high, according to officials. According to them, Adani was the only bidder for the 500,000-tonne tender, while Agarwal Coal, which also bid for the 750,000-tonne tender, quoted a higher price than Adani.

On Sunday, Adani and Agarwal Coal did not respond to emails or phone calls seeking comment. Despite record production by state-run near-monopoly Coal India Ltd, India has cut supplies to the non-power sector as it faced two of the worst power shortages in recent years in October and March.

B Sreedhar, managing director of Andhra Pradesh Power Generation Corp Ltd, one of the officials, said the current power shortage was not as bad as the one in October, but that the state was still living “hand to mouth.” “We haven’t been able to increase our stockpiles.” “Transport is a problem,” Sreedhar told Reuters, despite the fact that coal is available locally due to increased mining. According to officials, Andhra Pradesh, which had a 7% electricity deficit in the last three days of March, issued a tender this week “for urgent procurement” of 100,000 tonnes of imported coal.

Other state government officials said that state-owned utilities in India could import at least 2.6 million tonnes in the coming months to meet summer power demand, equaling total purchases in the previous 24 months.

Senior officials said that the western Maharashtra state has issued a tender for 2 million tonnes of coal, while the southern Tamil Nadu state may issue tenders for 480,000 tonnes.

Last month, the federal government-owned NTPC Ltd issued a tender to import 1.25 million tonnes of coal.

Picture Courtesy: Google/Images are subject to copyright

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