The Indian government has asked Coal India Ltd to sign agreements with power producers, guaranteeing them fuel supplies, the coal minister said Tuesday.
The government had earlier asked the state-run miner to sign fuel-supply pacts by March 31. But the company missed the deadline as its board members disagreed on clauses that required it to assure supplies or face penalties.
Coal India will have to meet 80 percent of its annual supply commitments to power producers but it can negotiate on the amount of penalty with fuel buyers, Minister Sriprakash Jaiswal told reporters.
Although Coal India’s board had deferred its decision on signing supply pacts, the government, which holds 90 percent of the company, issued a directive asking it to sign the agreements.