 "CIL set to achieve highest production growth rate in five years")
The company, ready to hit the market with its mega Rs 20,000-crore share sale later this year, would set a precedent by exceeding production over the targeted 482 MT this year against 452 MT last fiscal ended March, said coal minister Sri Prakash Jaiswal today.
CIL’s growth rate would stand upwards of 6.7% in the current fiscal helping the company beat the current high of 6.8% growth recorded in 2009-10.
Also Read
“Issues troubling CIL investors, including payment dues, would be resolved before the proposed follow-on issue,” Jaiswal told Business Standard in an exclusive interview. Consumers, largely power companies, have delayed payments totaling Rs 9,000 crore to CIL.
Power generator NTPC Ltd is alone sitting on Rs 3,000 crore of CIL’s receivables. Jaiswal said he has raised this issue with the power ministry.
Besides, S Narsing Rao, chairman and managing director, Coal India, asserted CIL would increase overall offtake to consumers by 7.5% to 500 MT this year against 465 MT in 2012-13.
“This would be achieved by implementing two strategies – accelerating project expansions of around 18 MT and higher liquidation of ground stocks,” Rao told Business Standard.
In an indication of the improving performance, CIL produced 37 MT in April, exceeding the production target, he added. The company has consistently liquidated pithead stocks to pull up supplies to power companies. Stock have come down from 70 MT in April 2012 to 58 MT in April 2013. Coal stocks have further come down to 53 MT over the past one month.
Coal India’s output performance assumes importance as the fate of over 60,000 Mw of new power capacities to be commissioned between 2009 and 2015 hangs on the incremental output achieved by the miner over the next three years.
The company had managed to beat a two year-long stagnation in production by increasing output by 4% to 452 MT last fiscal ended March. However, it has committed meeting at least 65% of the demand from the new capacities through domestic supply – a gargantuan task, given constraints posed by delayed green clearances and land acquisition in new mines.
However, the miner will have to keep a watch on delays in new environmental clearances (ECs) as many of CIL’s mines have reached their EC limits, forcing it to curtail production to avoid violating norms. As on March 15, CIL’s new mining capacity of around 40 MT was held up owing to delays in clearance by the environment ministry.
An additional 5 MT was stuck due to pending forest clearances. However, with the Cabinet Committee on Investment (CCI) clearing mega mining projects in bulk, output is seen improving further.
CIL's indecision on price hike despite Rs 6,000 crore additional outgo on salary hike has not gone down well with the company's minority shareholders. Besides, The Children's Investment Fund has challenged in the high courts of Kolkata and Delhi, the government interference in CIL pricing decisions.
The London-based hedge fund holds little less than 1% equity but is the single largest minority shareholder in the company. On being asked whether the government would address concerns of investor, Jaiswal said the government policy and the running of the company cannot be dictated by minority shareholders.