South West Pinnacle Exploration Ltd, which recently acquired a coal block in Jharkhand, is hopeful of starting production by 2024-25.
The company, which closed the financial year 2021-22 with total revenues of around ₹120 crore, expects an exponential growth once the mine is operational and is hopeful of earning additional revenue to the tune of ₹700-800 crore in the first three years of its operations.
According to Vikas Jain, CMD, South West Pinnacle, the mining plan is likely to be approved by Q2 of next calendar year and once that happens it will take another 12-14 months for clearances to come in.
“We recently acquired a coal block in Jharkhand that sits on an 84-million-ton geological reserve, by participating in forward auction, a highly competitive bidding process. The coal block mining development activities are in progress with plans to start coal production in the next 30 months (FY 2024-25). We expect revenues to kick in from FY25,” Jain told businessline.
In the first year post starting production, it may only get two-to-three months of operations and may be able to work at 25 per cent capacity. It expects to touch 100 per cent capacity by the third year of operations.
“There are many sponge iron units, washeries and steel plants near the mine area, so selling (the coal mined) is not an issue. We also plan to get into off-take agreements once our mining plan is approved,” he said.
The company, which claims to be one of the fastest growing private exploration services company in India, in the field of mineral and unconventional energy resources, is also open to the possibility of mining of bauxite and iron ores when suitable opportunity arises and once it stabilises its coal mining operations.
“Coal is not going anywhere and at least for the next 25-30 years we expect coal to support the energy needs of the country. By 2024-25 the import of thermal coal is expected to be brought down to zero so I see a good future,” he said.
Roadmap for exploration
South West Pinnacle is also looking to ramp up its exploration and drilling services both within and outside the country. Some of its existing clientele includes Reliance Industries, Rio Tinto Exploration (India), Hindustan Zinc and Tata Iron & Steel (TISCO) among others.
According to Jain, India is an under-explored market as compared to countries such as Australia and South Africa.
The exploration business is likely to witness a growth of around 15-20 per cent on a year-on-year basis backed by the impetus given by the government. The company also expects a lot of activity around coal bed methane (CBM) in the coming years with government and private clients floating tenders.
“In India we do not have CBM contracts but we are in the advanced stages of negotiations,” he said.