The management of Singareni Collieries Company Limited (SCCL) does not foresee a threat to its commercial activity owing to opening up of commercial coal mining to private companies as there were no coal blocks in SCCL area that were identified by Centre for allocation to private sector.
The private participation will only be limited to 220 blocks that were identified in coal rich States of Jharkhand, Chhattisgarh, Odisha and West Bengal, SCCL sources said.
The threat, however, may be from customers of SCCL who might want to procure quality coal at cheaper rates from other States. But, transportation charges to shift the coal all the way could be a deterrent to existing customers to migrate, much to the advantage of SCCL.
Power stations
Sources added that SCCL had about 3,000 customers but 80 to 85 % of its coal was purchased by eleven power stations at Ramagundam, Paloncha, Bhoopalpalli, Raichur, Kudgi, Parli, Muddanur, Kothagudem, Vijayawada and Jaipur in Adilabad. Some 4% to 5% coal produced by the State-owned PSU was purchased by cement companies while the rest was consumed by sundry units.
They also said private sector playing a dominant role in coal mining could take four to five years after the latest decision of the Central government to liberalise the activity as land acquisition, access to railways and environment approvals were a long drawn process.
Within this period, there was no question of competition with the private sector.
Client proximity was the strong point of SCCL being the only coal producing company in south India. The company harnessed its locational advantage to service a large market in and around its areas of operations.
High growth
It was not only thermal power plants and cement but steel, paper, textile, tobacco, ceramics, pharmaceuticals, distilleries and brick kilns that the company serviced.
As 90 % of coal output of the company was supplied to thermal power and cement plants, marketing of coal with emphasis on quality did not get the importance of the company in view of huge demand-supply gap.
The Centre’s decision was announced at a time when SCCL had registered a 8.61 % increase in despatches as compared to last year, the sources said
Against the targeted despatches of 51.30 million tonnes, by January end the collieries achieved 52.86 million tonnes (103%).
