Coal India raring to take on global mining giants

New Delhi: Coal India Limited (CIL), the Maharatna PSU is all set to face competitions with global mining giants after opening up of commercial mining in India. According to a senior CIL official, the state-controlled coal mining company has achieved the highest production in a day to the tune of 2.83 MT recently.

However, PSU is prioritising coal supply, rather than focusing on coal production. "Coal production does not matter much, but the supply to the consumer matters and that parameter should be looked into," an official said.

"Since the very beginning, the intention of the government was to make market competitive. So, 200 blocks were allocated to the private companies. However, when that experiment failed, the CIL was blamed for monopoly," the official added.

Nevertheless, the commercialisation in mining is a very good decision to improve CIL's efficiency amid the competition, company sources said.

The data also show that in the first half of the current fiscal year(2017-18) the coal production increased to 0.8 per cent and in the second half it jumped to 3.7 per cent compared to the last FY(2016-17).

Coal India also scored highest in Offtake to the power sector in current financial year in the tune of 454.30 MT with a growth of 6.8 per cent.

According to the company report, 80 per cent coal of CIL is being used for power generation. "Currently, power sector's coal demand is at 525 MT. Our production target for the coming Fiscal Year would be 650 MT," Gopal Singh, CMD, CIL mentioned said.

On the commercialisation issue, Singh asserts that there is enough space for all other companies to work.

Data also shows that the growth comes after the reduction in the production cost of Rs 53/- per tonne since last November.

Meanwhile, CIL also clarified about some shortages report in power plants and said that the Power Plants are far from the mines that's why they faced coal shortages. "To overcome that problem we need to enhance the transportation system." the official added.

Reportedly, in order to overcome supply hurdles, the PSU is looking at the effective utilisation of road network to deliver dry fuel to customers, especially power plants. With the rail network at its best carrying 320 rakes of fuel from coal pitheads to power plants every day, the road network can help boost supplies to power producers as a short-term measure.

The source said, "Coal India is ready to supply fuel through road networks. Coal India at present has a stock of 50 million tonnes (MT)."

According to the company data, Offtake during the April-February period was at 525 MT against the target of 541 MT. Coal dispatches to consumers in various sectors, including power, were 12 MT through a road network in April-October 2017-18.

The Maharatna PSU is also going for diversification, company sources mentioned. Reportedly, CIL will come up with 20,000 MW in 40,000 hectare land. Moreover, it would start the first gasification of coal project in Dankuni, from coal to Methanol.

In addition, the prime focus of the state-controlled coal mining company would also be liquidation of 55MT coal, which is in the stock.

CIL CMD has called a meeting with power producers in the first week of April in the national capital to discuss the new pricing policy. Under the new policy, Coal India will charge on every unit of gross calorific value(GCV) of the dry fuel, doing away the grade policy at present. CIL will also hold a workshop on April 5.