New Delhi: Bharat Coking Coal Limited (BCCL) has put a price on coal reject that has sat at its washeries for years. The company valued the material during FY2025-26 and brought it into its inventory at Rs 135.15 crore. The Comptroller and Auditor General (CAG) has questioned the basis on which those rates were set. What makes the entry unusual is where the stock started. For a long stretch it was carried at nil value in the company's books. It now sits there at a figure running into crores.
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The audit's central objection concerns the use of different rates for different lots of reject. Some reject was valued at around Rs 410 a tonne. Some was valued at as much as Rs 695 a tonne. Some was left at zero.
The CAG asked what clear basis lay behind each of those rates, given that they were applied to reject stock of the same type. The audit also asked the company to spell out the likely market price it had assumed, the saleability it had assumed, and the other parameters that went into arriving at the valuation.
The exercise centred on roughly 4.70 lakh tonnes of old coal reject lying at the Bhojudih washery. That material was put through a grade analysis conducted in line with Bureau of Indian Standards norms.
A quantity of 88,069.25 tonnes was then sold. The average realisation on those sales worked out to around Rs 377 a tonne.
BCCL treated that sale, together with demand for reject in the market, as the principal basis for valuing the older stock. The valuation rates the company applied sit above the average rate the sold material actually fetched.
In its reply to the audit, the company said the Bhojudih analysis was carried out during FY2025-26, and that the sale of 88,069.25 tonnes took place in the same period.
Its argument runs from the sale itself. Because reject was sold, the company said, demand for the material and its saleability are established. The valuation of the older stock was built on that footing.
BCCL went further. Ungraded coal reject lying at its other washeries is similar in nature, it said, and so the entire stock was valued with market demand and saleability in mind.
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BCCL's total inventory stood at Rs 3,046.88 crore as at March 31. That figure takes in coal, by-products and other stock. The Rs 135.15 crore of old coal reject has been added into it.
One distinction matters here. The Rs 135.15 crore is the accounting value of stock, not money received. The company has not sold reject coal worth that amount.
BCCL said its policy for valuing stocks of coal and coal by-products is already set out in its financial statements. The method for arriving at net realisable value for stock, reject included, forms part of its material accounting policy.
Based on that reasoning, the management took the view that no separate detailed disclosure was required in this instance, because the valuation policy is already part of the financial statements.
Washing coal separates out material that carries little coal and a high proportion of ash alongside the usable product. That residue is what the industry calls coal reject. What it fetches in the market varies with its quality, its ash content and what it can be used for.
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