The Hindu Business Line : Eastern Coalfields may post Rs 360-cr profit

Even though Eastern Coalfields Ltd (ECL) may end the year with a profit (provisional) of about Rs 360 crore against a loss of about Rs 670 crore last year, its future still hinges on the offtake pattern of coal by National Thermal Power Corporation (NTPC). This is because NTPC will remain the company's single largest consumer with a share of over 50 per cent of total production, even beyond 2011-12.

In fact, ECL is creating an additional capacity of about 13 million tonnes (mt) largely to meet NTPC's entire coal requirement of 23 million tonne per annum by 2011-12 for its Farakka and Kahalgaon power projects.

Highlighting the physical and financial achievements recorded for the first time in its corporate history, the Chairman & Managing Director, ECL, Mr D. Chakravarti, told newspersons here on Thursday that the turnaround was possible because of a 13.72 per cent growth in coal production, the highest made by any subsidiary of Coal India Ltd during the current year.

Till date, ECL, with a large number of labour intensive uneconomic underground mines and a huge workforce of 1,02,029, has been able to achieve a record production of 31 mt, remove about 45 million cubic metres of overburden (OB), and dispatch about 28 mt.

Mr Chakravarti said that the performance was noteworthy because the company was still a sick company under BIFR and was trying to shake off the status. He was confident that the company would come out from the purview of BIFR latest by 2008-09, while its entire accumulated loss of about Rs 5,260 crore would be wiped out by 2011-12.

The company is now implementing a revival plan recommended by the newly formed Board for Reconstruction of Public Sector Enterprises.

Meanwhile, the Cabinet Committee of Economic Affairs has approved the Rajmahal opencast mine expansion plan of 10.5 mt to 17 mt. A global tender has been floated during the month to select machinery and equipment suppliers on risk/gain sharing basis. Two more greenfield projects at the Rajmahal field have been envisaged, one at Chuperbhita for 4 mt per annum and the other at Hura-C for 3 mt per annum. These projects are earmarked also for meeting NTPC's coal requirement of 23 mt per annum from 2011-12.

Mr Chakravarti urged the Union Government not to allow NTPC to import non-coking coal in future in the interest of the financial viability of the new coal mining projects being undertaken by ECL.