This is in line with the Supreme Court directive to restrict ash content to 34 per cent in coal used by consumers in and around Delhi.

A CCL source told The Financial Express that coal reserves in CCL mines bear a maximum ash content of over 42 per cent and their consumers are mostly power houses.

Following the Supreme Court ban on the use of coal bearing over 34 per cent ash by power houses in and around Delhi from 2002, CCL has taken steps to produce coal with permissible ash content.

The source said the National Thermal Power Corporation (NTPC) and the Delhi Vidyut Board (DVB) are the major consumers of CCL's coal.

He said CCL will reach agreements with the consumers who will purchase washed coal from CCL with extra washing cost.

The source said CCL's Giddi coking coal washery has been converted into non-coking coal washery fromMay 1998 as it had been incurring huge losses and after conversion to a non-coking coal washery the production has been good.

CCL has seven washeries - Kargali, Giddi, Kathara, Swang, Kedla, Rajrappa and Piparwar. Most of the washeries have become old and productivity has come down. In fiscal 1997-98, these washeries together posted a profit of only Rs 2.13 crore.

The source said as SAIL has put a ceiling of 18.5 per cent ash content in washed coal, the feed ash to washeries has been restricted to 28 per cent. This has resulted in restricting annual clean coal production in CCL to only a little over three million tonne for the steel plants.

Meanwhile, the source said CCL has signed an agreement with the Bihar State Electricity Board (BSEB) on February 27 on payment for coal supplies to BSEB power plants. BSEB has undertaken that it would pay to CCL at the rate of Rs 1.75 crore in every 10 days against the current supplies of coal. BSEB owes 280 crore to CCL.