If the coal price is ripping through your budget, just stay away from it!
Well, that's the unambiguous message cement maker Birla Corp intends to send out.
The company has decided to go with coal bed methane gas rather than coal for its Durgapur plant owing to the long-term risks associated with coal prices after being linked to global benchmarks.
The decision came despite the fact that Coal India recently stepped back and reversed its earlier decision of a price hike.
Not just the 14 mw captive power plant, Birla Corp would be using coal bed methane gas to run quite a few key equipment at the unit.
The existing coal-fired slag drier is getting a replacement in the form of a roller press unit, used for drying and grinding of slag, which will be operated both by CBM gas and coal, which can be a substitute in case the gas goes scarce, an official of the company told DNA. Birla Corp would be setting up a dedicated pipeline to bring the gas to its plant and wouldn't be storing the same.
Birla Corp's move to look at alternative fuels comes at time when its operating performance took a big hit in the third quarter, with net profit plunging 37% to Rs43.72 crore as sales were marginally up at `537.83 crore due to costly power and fuel, and suspension of limestone mining activity, thus affecting its Chanderia unit.
In the long run though, the cement maker stands to gain in terms of savings. The switch would mean consumption of 5,110 tonne of coal a year would be avoided, and the plant would instead use 90,000 standard cubic metre per day of CBM to keep the operations running.The Durgapur plant is located in a region that houses the country's first commercially developed CBM site. It may be noted that Great Eastern Energy and Essar Oil have been producing gas from this block and selling the same to nearby industrial clusters.
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