Andhra Pradesh rejects Adani’s bid to supply imported coal

This is the first time in recent years that a major government tender for imported Coal Canceled at higher prices. Details on cancellation not previously stated.

India has asked utilities to increase coal imports to address domestic shortages. However, the costly imports could add to the financial woes of state-owned, debt-ridden power distributors, who have nearly $15 billion in overdue payments to power producers.

Adani, India’s largest coal trader, last month offered to supply 500,000 tonnes of South African coal at Rs 40,000 ($526.50) per tonne and another 750,000 tonnes at Rs 17,480 ($230.08), officials said.

Benchmark South African coal prices began hitting a monthly high of $176.50 a tonne in January in the wake of an export ban by Indonesia, hitting a record $441.65 a tonne in March due to the Russo-Ukraine war.

Officials said both the tenders were canceled as the prices quoted were too high. He said Adani was the sole bidder for the 500,000 tonne tender, while Agarwal Coal, which had also bid for the 750,000 tonne tender, had put in a higher price than Adani.

Adani and Agarwal Cole did not immediately respond to emails and calls seeking comment on Sunday.

India has cut supplies to the non-power sector as it faced its worst power shortfall in recent years in October and March, while state-run monopoly Coal India Ltd produced record production.

One of the officials, B Sridhar, managing director of Andhra Pradesh Power Generation Corp Ltd, said the current power shortage was not as bad as in October, but added that the state was living a “hand-to-mouth existence”.

“We haven’t been able to build stocks. Although coal is available locally because of more mining, transportation is an issue,” Sridhar told Reuters.

Andhra Pradesh, which faced a 7% power shortage during the last three days of March, this week floated a tender for “immediate purchase” of 100,000 tonnes of imported coal, officials said.

Other state government officials said Indian state-owned utilities may import at least 2.6 million tonnes in the coming months to meet summer power demand, which is equivalent to the total purchases in the last 24 months. Is.

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

Federal government-run NTPC Ltd had last month floated a tender for import of 1.25 million tonnes of coal.