Over the decades, Coal India often reported double-digit growth in production, but coal availability remained an issue due to rail logistics constrains. The problem is now set to be mitigated, courtesy the Centre’s push on infrastructure.

Anil Kumar Jha, Chairman and Managing Director of Coal India Ltd, said coal supplies should start moving at great speed beginning this year as a number of key projects are reaching the final stage of completion.

“The isolation of some vast coal reserves in Jharkhand, Odisha, Chhattisgarh, Uttar Pradesh and Madhya Pradesh is to end soon. There will be a quantum jump in coal evacuation logistics in two years,” Jha said in his first interview since taking over on May 18.

Supply boost

CIL has taken an “aspirational target” to increase coal despatches from 580 million tonnes to 681 mt this fiscal. The production target has been set at 85 mt higher than last year’s 567 mt. Comparatively, CIL increased its production by 104 mt, and its off-take or supplies grew by 109 mt, over the last four years.

Jha reckons the target is steep, but doable if the monsoon doesn’t get extended or the rainfall doesn’t exceed normal limits, and if the law and order situation in the Odisha coalfields improves even slightly. Frequent strikes, especially in and around the prolific Talcher coalfields, in Odisha, cause major production losses.

Jha is confident about meeting the target this fiscal. “I am very sure we will land up somewhere near the FY18 target both on production and despatch; this will help mitigate the supply shortfall once and for all,” he said.

According to him, the Bilaspur-based South Eastern Coalfields and the Sambalpur-based Mahanadi Coalfields will contribute half of the production growth; the Ranchi-based Central Coalfields (CCL) and the Singrauli-based Northern Coalfields (NCL), will also contribute significantly..

The recently completed 53-km Jharsuguda-Barapali rail-link connecting Ib-Valley reserves in Sundargarh district of Odisha will play a crucial rule in enhancing supplies. The 45-km Tori-Shivpur line, which will facilitate coal transportation from large Magadh and Amrapali reserves by rail and road, will be completed by December. In Chattishgarh, the 90-km Kharsia-Dharamjaygarh link will also be partly operational in December, Jha said.

However, CIL’s profit after tax fell nearly 40 per cent since March 2014, partly owing to the increased focus on the power sector, which pays 20 per cent less than other consumers for low-quality thermal coal.

Jha, however, hinted that 2018-19 should see profitability improve as the provisioning for wage increases were over in the last fiscal. CIL saw nearly ₹10,000 crore outgo in FY18. This includes ₹2,700 crore arrears to officers, ₹7,400 crore provisioning for gratuity and other benefits to non-executive employees on account of a ₹800 crore hike in wages. “The financial performance should improve in FY19,” he said.

Power JV

Meanwhile, CIL is expected to firm up a joint venture with NTPC for pithead power generation this fiscal. On behalf of CIL, its mining subsidiary MCL will participate in the JV to set up a 2X800 MW facility at Sundergarh in Odisha.

The preliminary work is through. The project got coal linkage (in-principle fuel supply assurance), environment and forest clearance proposals and in advanced stages (of approval). We have written to NTPC for participation and hopeful to finalise the JV this fiscal,” he said. He is a part-time chairman in MCL.

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