November 27, 2021

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The World Stock Markets Tips & Targets, News, Views & Updates

‘Increasing production and protecting environment are equally important to CIL’

Pramod AgrawalPramod AgrawalPramod Agrawal, CIL chairman and managing director

Production, evacuation and greening are on the top of the list of Coal India’s agenda. Pramod Agrawal, CIL chairman and managing director, speaks to Indronil Roychowdhury on the company’s action plan to fulfill its agenda. Edited excerpts:

What is your outlook for CIL for the rest of the fiscal, after an almost flat second quarter performance?

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We expect to close the fiscal with more than 540 million tonne (mt) of supplies to the power sector, the highest ever. Till October, despatch to power sector was 291 mt. E-auction bookings will likely surpass the previous high of 124 mt of last year. We are aiming for a production of 640 mt and plan to despatch 680 mt by the fiscal’s closure if the demand pans out favourably.

What is CIL’s Capex spend so far this fiscal of the total targeted `17,000 crore?

Till October we have spent Rs 6,810 crore, nearly 26% increase compared to our spending the same period last year. In FY21, CIL had more than doubled its capex to an unprecedented high of around Rs 13,284 crore, a 112% growth.

Do you think constrained cash flows are hampering CIL’s desired growth?

Our growth plans have never suffered for delays in coal sale receivables since our fundamentals are strong. We are almost a debt free company. Much of mining and evacuation projects are met through our own funds. At the closure of last fiscal, we had a little over of Rs 17,200 crore in cash and balance.

Is CIL looking at any permanent solution to this persisting problem of supply issues during monsoons?

The monsoon’s whims adversely affect our operations, especially if it is extended. Our impetus on coal transportation via conveyor belts and mechanised loading by silos help in reliable supplies. But better logistics planning and building up adequate stock, especially during the last quarter and the first quarter of succeeding fiscal, by power plants can tide over the problem to a large extent.

Do you think it is a paradox to be asking CIL to produce more coal on one hand and on the other hand asking it be a net zero company?

Increasing production and protecting environment are equally important. Our foray into solar power generation, increased plantation, and mechanised loading are steps towards that direction. Mechanised loading would significantly reduce CO2 emission and other air pollutants. A recent pilot study in two opencast mines on environmental advantages of mechanised loading showed us that. We are targeting plantation over 1,310 hectare this fiscal, which hovered around 750 to 850 hectare during previous four years. Going forward we shall step up our greening measures aiming for plantation on 6,800 hectare by 2025-26.

What are your plans for production enhancement?

We have cleared 13 of 15 greenfield projects to pursue under mine development operator mode having 170-mtpa combined capacity. We have floated global tenders for 10 projects. We have given nod to 9 coal mining projects with 66.70-mtpa capacity and incremental capacity of 36.70 mtpa for this fiscal. This comes on the heels of highest ever 36 coal mining projects cleared in FY21. The total capacity is 332.77 mtpa. We are in constant dialogue with state governments for land acquisition and possession.

What is the latest status of evacuation projects?

We are concurring first -mile connectivity with main rail lines. This will cost us about Rs 2,335 crore. The company is investing Rs 3,750 crores in 21 new rail sidings. We are constructing 3 main rail projects under CCL, SECL and MCL on deposit basis which will enhance our evacuation capacity by 170 mtpa over the existing capacity. We have also formed rail JVs with Chhattisgarh, Jharkhand and Odisha for additional carrying capacity of 160 mtpa. All these will come up by 2024.

How do you foresee India’s energy sector shaping up in the long run given the international pressure to do away with coal?

Renewables and cleaner energy should take over coal’s role at some point of time in future. But coal is here to stay for at least next decade as it meets around 55% of the country’s primary commercial energy and generates nearly 70% of power. So abruptly expunging it would not be viable from the energy perspective. There will be a gradual phase-out for a greener future of the country. We are sensitive to that.

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