Singareni Collieries to invest Rs 3,500 cr for capacity build-up

Amit Mitra Updated - March 12, 2018 at 12:31 PM.

Rs 2,000 cr to go for shoring up underground mining capacity

Mr S. Narsing Rao, Chairman and Managing Director, Singareni Colleries Company Ltd.

Singareni Collieries Co Ltd has lined a capital expenditure programme of Rs 3,500 crore for the 12th Plan Period to enhance its coal mining capacity from 52 million tonnes to 57 million tonnes.

In line with the domestic coal industry trend, the miner has proposed an investment of Rs 2,000 crore, as part of its overall spending plans, to shore up its underground coal mining capacity to 18 million tonnes in the next five years.

“Underground coal mining is the only long-term solution to coal availability in India,” Mr S. Narsing Rao, SCCL Chairman and Managing Director, told media persons on the sidelines of a seminar on the Indian Mining Industry here on Friday.

Higher costs

Underground coal mining projects require relatively larger investments. While cost of production from underground mines is about Rs 2,357 a tonne, that from opencast mines is around Rs 1,130 a tonne. Last fiscal, SCCL's aggregate cost of production was Rs 1,392 a tonne, with the average sales realisation during the year being Rs 1,610 a tonne, including the premium it charges through e-auction sales.

Power sector

Mr Rao said the company, as part of its plans entry into power generation, is investing about Rs 7,000 crore to set up up a 1,200-MW power unit in Andhra Pradesh. “We expect to commission the first unit of 600-MW by February 2015, and the second unit three months after that. We have already got loan sanctions for Rs 3,000 crore,” he said.

Last fiscal, the company's turnover touched Rs 2,050 crore, the highest in its history, and 14 per cent more than the previous fiscal.

Since January this year, SCCL has switched over to the new price mechanism based on gross calorific value. “We have, however, kept the new pricing revenue-neutral for our customers,” Mr Rao said.

Industry analysts believe that the new pricing will enable SCCL to get better price for higher-quality coal and relatively lesser rate for lower-grade coal in the long run.

SCCL, an important supplier of coal to NTPC, AP Genco, Karnataka Power Corporation and Maharashtra Genco, has a price range from the lowest (F-grade) of Rs 690 a tonne to about Rs 2,500 a tonne.

>amitmitra@thehindu.co.in

Published on February 24, 2012 15:55