Coal India Ltd (CIL) had witnessed an historical performance during FY19, wherein the company had breached the 600 MnT mark both for coal production and sales in the fiscal period.
Despite media reports claiming the divergence of CIL into separate listed companies to boost competition and raise government funds, the company remains wholly committed towards meeting the coal requirement as a consolidated unit.
Based on the demand projection in ‘Vision 2030’ for coal sector in the country and subsequent demand projection, a perspective plan has been prepared to project production schedule in medium and long term basis up to 2030-31 wherein CIL has been envisaged to increase coal output at the rate of about 7.6% till FY25.
Recently, CIL had issued its annual report for the FY19, wherein the miner had highlighted the major plans and also the intended investments in diversification projects. Major take-away from the report are listed below:
(1) Enhanced Coal Sales to Domestic Sector: The demand for coal was estimated to be 991.35 MnT for FY19, against which the indigenous availability was 732 MnT. Out of the total volume, CIL had accounted for the major part of the supply, noted at 608.2 MnT during the period.
A major thrust was made to bring the thermal power stations of the country out of critical stock position. At the same time, domestic tightness for coal supply had also helped CIL to attain higher premiums in e-auction sales.
Booking of coal in the various e-auction schemes conducted during FY19 was against a premium of INR 8983 Crores, at 77% over the notified price of coal. The booking of coal in the auctions conducted in FY18 was against a premium of INR 6589 Crores, at 50% over the notified price.
Amendment made in Linkage Auction: In order to raise the availability for non-power sector, fresh linkages to customers were granted through auction of linkage.
In the events of Tranche-IV of the linkage auctions conducted during FY19, linkage of 33.18 MnT per annum was secured by the consumers at an average premium of 32.68% over the notified price. Overall, supply made in the four tranches of auctions has now reached 78.36 MnT per annum, granted at weighted average premium of 20.26%.
It is to be noted that the coal against the linkages secured in the linkage auctions are supplied under the FSAs to be executed for a period of 5 years, the tenure of which can be extended further for 5 years. However, in case Steel sector, the FSA tenure has been increased from 5 to 10 years, with provision of mutual extension by another 5 years.
Executed FSA: CIL has stated that there exist an operative Fuel Supply Agreement (FSA) of 572 MnT per annum with the power sector as on 31 Mar’19, considering all the agreements made under the NCDP (National Coal Distribution Policy) and that executed under the provision of SHAKTI scheme.
The total commitments with non power consumer stood at around 95 MnT per annum in the period.
(ii) Steps Taken to Improve Quality of Coal Product: At present, CIL is reportedly operating 16 coal washeries with a total coal capacity of 36.80 MnT per annum. Out of which 12 are coking and balance 4 are non-coking.
The total washed coal production from these existing washeries for FY19 was recorded at 13 MnT.
In order to enhance the quality of coal product, CIL has envisaged to set-up 18 new washeries with state-of-the-art technology in the field of coal beneficiation with an aggregate throughput capacity of 91.10 MnT per annum.
Notably, Dahibari washery with a washing capacity of 1.6 MnT per annum was commissioned back in Aug’18.
Furthermore, for enhanced customer satisfaction, CIL had given special emphasis to quality management of coal from mine to dispatch point.
As many as 46 coal testing laboratories has been set-up across the CIL’s subsidiaries are now NABL accredited and accreditation process is underway in respect of another 9 labs.
Subsequently, as a result of conscious and continuous measures taken towards quality maintenance, the gap between the weighted average of declared and analyzed GCV of coal has reduced remarkably to 275 Kcal/Kg in FY19 from 383 Kcal/Kg in 2017-18, narrowing down the variation well within one GCV band.
(iii) Upcoming Projects: The company stated that 5 coal projects, with a sanctioned capacity of 11.07 MnT per annum and sanctioned capital of INR 989.43 Crores were completed during the FY19.
Besides, 2 coal projects namely- New Kenda OCP and Garjanbahal OCP, had started producing coal during FY19, while attaining output of 2.91 MnT.
In addition, a total of 120 coal projects costing INR 20 Crores and above, were slated to be in different stages of implementation. Out of which 66 Projects are on schedule and 54 Projects are delayed.
Apart from the coal projects, CIL had also approved 2 non-mining projects with a sanctioned capital of INR 6656.33 Crores. The Rail projects under the collaboration with Chhattisgarh East Railway ltd (CERL) and Chhattisgarh East West Railway ltd (CEWRL), are aimed to optimize coal evacuation.
It is pertinent to note that two major rail links funded by CIL subsidiaries – Jharsuguda- Barpali- Sardega in Odisha and Tori – Shivpur in Jharkhand have become operational during FY19.
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