 "Environmental clearances have started to come: S Narsing Rao")
Kolkata-based Coal India Ltd (CIL), the world's largest coal miner, expects its production to grow at a four-year high of five per cent in the current financial year. This is despite severe delays in environmental clearances and labour issues, S Narsing Rao, CIL's chairman and managing director, tells Sudheer Pal Singh. Edited excerpts:
How does overall production look like for this financial year?
Production has risen significantly. The main issue of environmental clearances is being addressed. The coal ministry is highly concerned about delays and is constantly monitoring, project-by-project. Now, the clearances have started and, hopefully, we will close this year with five per cent output growth. Yet, we might miss the target of 482 million tonnes by around seven mt. Six of our mines with a capacity to produce 20 mt are awaiting these approvals, which were supposed to come by October. These include the Gevra and Bhuvaneshwari opencast projects in South Eastern Coalfields and Mahanadi Coalfields, respectively.
Are you sure environmental considerations are not getting ignored in this rush for project approvals?
With concerted effort on all fronts, all of that is improving. And, the coal ministry is closely coordinating with its environment counterpart on pending clearances. Another issue is enhancing the Environment Clearance (EC) limit in mines. Applications for raising EC limits in three of our mines with production capacity of 13 mt are pending.
The bulk of last year went into resolving the issue of fuel supply agreements (FSAs) with consumers. What is the status?
We have largely resolved the issue. FSAs had to be signed for a total of 78,000 Mw power capacity. We have done 157 FSAs, corresponding to a capacity of 71,145 Mw commissioned or likely to be commissioned between April 2009 and March 2015. This leaves only a few projects, which do not meet the conditions.
How much coal are you likely to import to meet the FSA obligation of 15 per cent of annual contracted quantity (ACQ) under imported supply for the current financial year?
With less than three months this year, it is unlikely we would import any quantity before March 31. Around 15-20 power companies had expressed interest in securing coal through CIL. We had floated the tender for imports through agencies like MMTC. The process is on.
How are you placed on capital expenditure?
We had a capex target of a little over Rs 5,000 crore for this financial year, apart from the planned capex for assets acquisition abroad. By the end of November, we had achieved about 80 per cent of the proportionate target. We are on track to meet the targeted spending. We have progressed on our acquisition plans abroad but signing of a deal might or might not occur this year (FY14). It is a lengthy process, with negotiations over a period of time.
CIL's trade unions have spent a lot of time this year opposing the government's plan to disinvest its stake. What is the status of talks?
We have been successful in resolving most of the concerns of the unions through frequent discussions. Their opposition is not an issue any more. There is no threat of a strike. But the other issue of law and order disrupting production continues. The problem is acute in Naxal-affected states such as Jharkhand. We have been losing 30,000 tonnes of output daily in the Talcher coalfield since October 1, due to local-level political elements.
How does overall production look like for this financial year?
Production has risen significantly. The main issue of environmental clearances is being addressed. The coal ministry is highly concerned about delays and is constantly monitoring, project-by-project. Now, the clearances have started and, hopefully, we will close this year with five per cent output growth. Yet, we might miss the target of 482 million tonnes by around seven mt. Six of our mines with a capacity to produce 20 mt are awaiting these approvals, which were supposed to come by October. These include the Gevra and Bhuvaneshwari opencast projects in South Eastern Coalfields and Mahanadi Coalfields, respectively.
Are you sure environmental considerations are not getting ignored in this rush for project approvals?
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I am not saying environment and forestry issues have to be sacrificed for speedy clearances. But the delays should be on the merit of the case and on technical considerations. The issue is delay in processing of applications. Even if a project is denied clearance, the decision has to come in a reasonable time. The file travels through at least 37 windows for years.
With concerted effort on all fronts, all of that is improving. And, the coal ministry is closely coordinating with its environment counterpart on pending clearances. Another issue is enhancing the Environment Clearance (EC) limit in mines. Applications for raising EC limits in three of our mines with production capacity of 13 mt are pending.
The bulk of last year went into resolving the issue of fuel supply agreements (FSAs) with consumers. What is the status?
We have largely resolved the issue. FSAs had to be signed for a total of 78,000 Mw power capacity. We have done 157 FSAs, corresponding to a capacity of 71,145 Mw commissioned or likely to be commissioned between April 2009 and March 2015. This leaves only a few projects, which do not meet the conditions.
How much coal are you likely to import to meet the FSA obligation of 15 per cent of annual contracted quantity (ACQ) under imported supply for the current financial year?
With less than three months this year, it is unlikely we would import any quantity before March 31. Around 15-20 power companies had expressed interest in securing coal through CIL. We had floated the tender for imports through agencies like MMTC. The process is on.
How are you placed on capital expenditure?
We had a capex target of a little over Rs 5,000 crore for this financial year, apart from the planned capex for assets acquisition abroad. By the end of November, we had achieved about 80 per cent of the proportionate target. We are on track to meet the targeted spending. We have progressed on our acquisition plans abroad but signing of a deal might or might not occur this year (FY14). It is a lengthy process, with negotiations over a period of time.
CIL's trade unions have spent a lot of time this year opposing the government's plan to disinvest its stake. What is the status of talks?
We have been successful in resolving most of the concerns of the unions through frequent discussions. Their opposition is not an issue any more. There is no threat of a strike. But the other issue of law and order disrupting production continues. The problem is acute in Naxal-affected states such as Jharkhand. We have been losing 30,000 tonnes of output daily in the Talcher coalfield since October 1, due to local-level political elements.