Lanka Coal Company (LCC) has borrowed Rs 20bn from the Bank of Ceylon (BoC) to pay for overdue shipments, but a crisis has been averted as the 2022-23 season will be completed with a total of 30 vessels bringing enough stocks for up to September this year. LCC typically meets the cost coal shipments using [...]

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Coal crisis averted; 30 vessels with enough stocks here soon

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Lanka Coal Company (LCC) has borrowed Rs 20bn from the Bank of Ceylon (BoC) to pay for overdue shipments, but a crisis has been averted as the 2022-23 season will be completed with a total of 30 vessels bringing enough stocks for up to September this year.

LCC typically meets the cost coal shipments using payments made by the Ceylon Electricity Board (CEB) which buys the coal for use at the Lavijaya coal power plant. However, the CEB in recent months ran dry of money to settle its bills. With the revision in electricity tariffs, the utility is expected to have sufficient revenue now to make the payments.

At present, the 26th vessel for the season is being unloaded while the 27th and 28th have also arrived, LCC Chairman Shehan Sumanasekera said. The last two consignments are now on the way.

The loan from the BoC was used to settle outstanding payments to Swiss Singapore Overseas (Pte) Ltd, from which company coal was ordered some months ago. The other shipments–from Coral Energy DMCC–are on credit with the first payments due in June and July. Disbursement will be according to coal usage.

Earlier, Sri Lanka was to also buy coal from China’s Combasst Industries Development Ltd, along with from Coral Energy. However, Combasst could not supply as it had verification issues and could not open a non-resident rupee account in local banks. The coal from both companies is of Russian origin. Coral Energy is selling at a fixed price of US$ 240 for a metric tonne.

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