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Coal India Ltd (CIL) had begun the current fiscal on a promising note. The state-run company ended 2012-13 with a record 7.4 per cent growth in sales and a modest 3.8 per cent rise in production.
The world’s largest coal miner also saw a 17 per cent increase in net profit during the year, up from 13 per cent the year before.
But nine months down the line, things are not looking as rosy. The company lost 6 million tonnes (mt) of planned output in October, largely due to an above average monsoon.
And, as if that were not enough, CIL has been losing 30,000 tonnes of sales a day since October 8, due to a virtual blockade at the 70-mt-a-year Talcher Coalfields in Odisha.
As of December, production and off-take were lagging 15 mt and 12 mt, respectively, behind the Plan target for 2013-14.
If key green clearances do not arrive immediately, two of its largest mines (Bhubaneswari and Lakhanpur) in Talcher will come to a grinding halt in February, leading to a loss of another 8 mt in production this fiscal.
Company sources say things are fast slipping out of hand, and there is little prospect of repeating last year’s performance.
Talcher crisis
“We will be extremely happy to end up supplying anything near 485 mt of coal (against the Plan target of 492 mt) this fiscal,” a CIL official told Business Line, requesting anonymity.
The job on hand is easier said than done.
It depends on a number of factors, including availability of wagons and mitigating the crisis at Talcher, where a local MLA-led trade union is fighting a pitched battle against a CIL contractor.
Crucial agreements But that is just the beginning of CIL’s concerns. In 2012, the company was forced to enter fuel supply agreements with power projects with 60,000 MW capacity, which are scheduled for implementation between 2009 and March 2015.
Of the total, a little over 40,000 MW worth of capacities have already come on stream and the rest are expected to be implemented in 2014-15. If all the power projects come up in time, CIL will have to step up supplies to 570 mt in the next fiscal, which looks impossible now.
The question is whether all the power projects will go on-steam in time. If they do, CIL is going to pay penalties for not fulfilling the supply commitments. The answer will be out in 2014.
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