State-owned Coal India Limited (CIL) reported a 22.2% rise in consolidated profit at Rs 4,629.87 crore for the quarter ended June 30, mainly on higher income. The company had posted a consolidated profit of Rs 3,786.44 crore in the year-ago period. CIL’s consolidated income increased to Rs 26,089.20 crore from Rs 25,359.30 crore in the year-ago period.
Total expenses stood at Rs 19,077.44 crore during the quarter under review as against Rs 19,272.43 crore in the corresponding quarter of the previous fiscal. Production in the April-June quarter stood at 136.94 MnT as compared with 136.85 MnT in the year-ago period.
On a standalone basis, the coal behemoth’s profit in the April-June quarter rose to Rs 83.23 crore from Rs 68.21 crore in the year-ago period. Standalone income during the June quarter was Rs 282.77 crore as against Rs 282.65 crore in the year-ago period.
Target: 1 BnT by 2025
Addressing a select gathering of analysts at Coal Bhawan in Kolkata post the declaration of Q1 results, CIL Chairman Anil Kumar Jha said: “Although India has resources to the tune of 320 BnT, production in the last fiscal was 730 MnT of which CIL contributed 607 MnT – almost 83%. Private miners chipped in with 40-45 MnT. So there is a clear deficit of 250 MnT or so. India imported 230 MnT last year. Coking coal imports amounted to 55 MnT whereas non-coking coal imports touched 190 MnT in the last fiscal. This shows that the scenario is indeed grim. CIL is seeking to bridge this gap.
CIL provided 1.5 MnT of washed coking coal last year and targets to provide 2 MnT this year. Our target is to produce 1 BnT per annum by 2025-26. My perception is that the situation will stabilize around 2030 with demand reaching a plateau of 1.4 BnT.
The Central Electricity Authority has revealed that per capita consumption in India is 1100 units. At present, coal contributes around 70% towards electricity generation. However, this will decrease in the days to come with the contribution from renewable spiking at a steady pace.
No ‘Critical’ Power Plants
However, as Jha emphasized, the moot point is to ward off the possibility of coal shortage at power plants and CIL has achieved this commendable feat on April 1, 2019. No power plant in the country today, he said, is ‘critical’ or ‘super-critical’. Of the mandated 22 days of stocks at power plants, the average stock at plants today is 15 days of combustible coal and CIL is currently producing 11 lakh tonne per day.
CAPEX Stood at Rs 9,300 crore
Dwelling on the capital expenditures the company has undertaken, Jha said: “The focus is to increase the departmental production of CIL. We have spent Rs 6000 crore in the last fiscal to buy heavy earth moving machinery. The CAPEX stood at Rs 9,300 crore last year. This year it should reach Rs 10,000 crore. The most important point is that non-power sector dispatches shot up to 4 MnT last year.”
Explaining the bottlenecks in mines development, the Chairman averred: “Of the 364 CIL mines in the country, only 40 are contributing more than 60% of the overall annual production. More than 300 mines jointly contribute less than 13%. However, we are a state-owned enterprise and no mine has, to date, been struck off the operations roster merely on economic grounds because it is not our sole objective to earn profits. CIL has spent more than Rs 400 crore last fiscal in CSR-related activities.”
Stripping Ratio
Responding to a query related to the vital stripping ratio, Jha said: “Contrary to reports, CIL’s stripping ratio is increasing. The amount of waste material excavated per tonne of coal mined, which is called the stripping ratio, has actually been increasing over the years.
New Rail Networks
Fielding queries related to offtake and the development of the coal transportation network in the country, Jha turned the spotlight on the new projects in the pipeline. “Rs 220 crore has been channelized for the development of three major rail networks in the country,” he said. The three new lines are from Tori to Shibpur in Jharkhand, Jharsuguda to Sardeja in Odisha and the East-West corridor in Chhattisgarh.
The Chairman said that CIL has inked as many as 17 joint ventures for developing railway networks and is working closely with the Union Railway Ministry for increasing the provision of rakes. Rs 600 crore has already been spent to buy 40 new rakes.
He also highlighted that 18 new coal washeries are on the anvil with capacities ranging between 4 and 10 MnT.
Offshore Investments
With a view to reducing the country’s dependence on imports for coking coal CIL, Jha said CIL is working to develop good coking coal properties abroad. “Offshore investments in mining are inevitable to reduce the import burden.
CIL’s technical director and his team are in East Russia at present to investigate the possibility of opening a new mine there. Our teams have also toured two locations in Australia and Canada each and we have decided to start operations at these sites in the near future,” he informed.
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