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The shortage of coal at thermal plants, which had triggered fear of massive power outages recently, could well be a thing of past, with Coal India Ltd ramping up production to meet the higher coal demand. The state-owned miner, which has registered a sustained double-digit growth so far this fiscal, is hopeful of achieving a production of close to 770 million tonne (mt) next fiscal. In an exclusive interaction with businessline, CIL Chairman Pramod Agrawal allayed apprehensions regarding a possible crisis in power situation next year. Excerpts:
CIL has been witnessing a steady growth in production. At this rate, where do you see the production going up to by FY24?
We sustained a double-digit growth spanning over the entire current fiscal. Despite the target being ambitious and challenging at 700 million tonnes, we are on course to reaching it by FY23 closure. It would mean a 12.4 per cent growth over the high base of FY22 and 78 mt jump in volume terms. Going forward, in the next financial year, even at 10 per cent growth our production would be 770 mt.
It is being reiterated that there is not likely to be any crisis in power situation next year. Do you think it is possible to avert the crisis?
Cyclical fluctuation in power demand is not something unusual. But I do not foresee any power crisis as such. The answer to meeting higher coal demand is enhanced production. We would not slack the tempo of our output set into motion this year. What gives us confidence is the strong growth in over burden removal, which is 18.6 per cent so far in this fiscal. OB exposure gives quicker access for coal extraction as the coal seam is exposed and is ready for picking.
Our two-pronged approach is to scale up production through new projects and expansion of existing projects. We have started three mines in the current financial year with three more on the anvil. During previous two years ending FY22, we have approved a total of 52 projects having incremental capacity creation of aggregate 378 mt per annum. These will start contributing in a phased manner in the coming years.
When do you see a possibility of a price hike? Does having no price increase for around five years impacting your margins?
To fix a timeline on price hike would not be proper. Despite no price increase for about five years our PAT during the first half of this fiscal was ₹14,878 crore. This is historic high for H1 of any fiscal so far. By not raising coal prices we have helped the country in containing the inflation to some extent because any increase in coal price has a cascading effect. Having said that, as a corporate entity, we need to be adequately compensated for our cost inputs especially explosives and diesel. We will take a call on coal pricing with a balanced approach – protecting our EBITDA and shielding the nation from the impact.
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