Odisha’s Coal Royalty Dips with MCL’s Falling Production Trend

Coal royalty collection in Odisha is declining for the first time since 2012-13. The fall in collection in attributed to the downtrend in coal output by Mahanadi Coalfields Ltd (MCL), the biggest producing arm of Coal India Ltd (CIL).

Coal revenue collection in the state in Odisha was INR 1384.52 crore by the end of February. In 2015-16, the royalty collection stood at INR 1627.27 crore. Royalty collection from coal has progressively rose from INR 1245.24 crore in 2012-13 to INR 1378.58 crore in 2013-14 and to INR 1439.17 crore in 2014-15.

MCL has a target to produce 167 MnT of coal out of CIL’s total output of 598 MnT pegged for this fiscal. But, sporadic halt in work at some of its key mines might pull down actual output. The Ministry of Coal, taking note of the hit in production, estimates that the shortfall in production by MCL could be in upwards of 20 MnT in this fiscal.

Coal secretary Susheel Kumar has conveyed to the Odisha chief secretary to improve the law and order situation at MCL mines to ensure production does not suffer. Other issues like rehabilitation & resettlement (R&R) are also contributing to the falling production trend. Due to protests on R&R issues, the production is getting impacted. Kumar who recently visited the MCL area admitted there are some serious problems, especially the ones related to R&R at its operating mines. The coal secretary has even hinted that if the Odisha government does not do enough to improve the situation, the ministry can take a call on shifting coal production out of Odisha by assigning higher output target to some other Coal India Ltd (CIL) subsidiary.

MCL officials were not immediately available for a comment.

Actual production by MCL in April-February period is 125.64 MnT, achieving 84 per cent of the target. Barring Western Coalfields Ltd (WCL) which has seen de-growth of 5.4 per cent, MCL has seen the slowest growth (1.4 per cent) among the rest of the subsidiaries. In terms of coal offtake, MCL has despatched 130.06 MnT at the end of February, an achievement of 87 per cent of the target and growing by 2.3 per cent over the same period of previous fiscal.

Total coal output by all CIL subsidiary companies (on February end) had reached 488.06 MnT, meaning an achievement of 91 per cent of the targeted figure.