‘Coal will remain the dominant source’

We are chasing a 660-million tonne target this fiscal, says Coal India chairman

June 14, 2019 10:40 pm | Updated July 04, 2021 05:36 pm IST

A year after taking charge as chairman at Coal India Ltd., Anil Kumar Jha looks back at the year gone by with a degree of satisfaction. CIL’s subsidiaries, spread across India, operate round-the-clock in temperatures that vary between O degrees celsius in winter and about 50 in summer. “Our men work round the clock in areas where the police fear to go after dark,” he said in an interaction with The Hindu. The company’s bugbears remain the same.. land acquisition, delayed forest clearances and law and order issues. Yet, coal is here to stay for the foreseeable future. CIL also has overseas ambitions. Edited excerpts:

Tell us about your journey since May last year.. To what extent could you fulfil your agenda?

It has been challenging, yet amply satisfying. My aim was to take the production to higher level and increase supplies to consuming segments, especially power sector. The 2018-19 figures bear testimony to our success achieved through a unified, concerted team effort.

Coal India for the first time breached the 600 Million Tonne (MT) production and offset mark, clocking growths of 7% and 4.8% respectively. Coal production was 607 MTs against MoU target of 610 MTs.

We have been able to script a new high in coal-supplies to thermal power plants. Most importantly, as of April 1, 2019, there was not a single coal-fired power plant in critical or supercritical list for want of coal.

What are the main challenges before CIL now?

Primarily land acquisition, environmental and forestry clearances, law and order situation and R&R issues are major challenges to ramp up our production. We are also beset with evacuation issues.

What are your views on CIL achieving its production target this fiscal. Are last year’s growth levels sustainable?

Production will pick up gradually. We are chasing a 660-million tonne MoU target. Many of our companies have taken measures to keep production during the monsoon months on an even keel. We face some problems in Mahanadi Coalfields Ltd. (MCL) and in Bharat Coking Coal Ltd. (BCCL). Efforts are on to tackle them.

Some subsidiaries like BCCL are not doing too well. Could you elaborate a little on this? Also, is the OBR satisfactory?

BCCL is besieged with land acquisition, R&R, law and order and certain encroachment issues that impeded its production. We are dealing the issues with the appropriate authorities to iron them out. There have been some bottlenecks regarding over burden removal (OBR). Land acquisition is one issue for which we have taken necessary steps making some headway. Timely non-finalisation of contracts issue was a bottleneck because of certain in-built clauses. These are being addressed and tendering for purchase of high capacity. Heavy earth moving machinery has been fast-tracked. Once inducted, things would improve. MCL faces law and order problems.

How did you manage the good numbers for CIL last fiscal?

Yes, it was a phenomenal performance by CIL. The bottomline was good for the fourth quarter and the year. Better average realisation in both FSA and e-auction sales, coupled with operational cost-control, propelled CIL to its best-ever financial performance. Importantly, coal quality variance was under control and we have been able to arrest the grade slippage largely.

Bottomline improvement was also due to the major provisioning that you had to make in 2017-18 on account of the enhancement of the gratuity ceiling..

Yes. Over 40% of the cost of production is on account of salaries. As of April 2019, CIL’s workforce stood at 2.85 lakh, but this is reducing by around 16,000 annually through natural attrition. Induction is around 3,000 on account of employment for land-losers and for statutory jobs. We do expect to protect our profits, this year.

You have commissioned two long-pending rail infrastructure projects. Has it improved evacuation and what more needs to be done?

As far as rail logistics is concerned, rake supply has considerably improved. We are refurbishing our sidings for increased loading. Tori-Shivpur rail line (Jharkhand) is already operational. Once road infrastructure linking the pit-head to loading point is further intensified and sidings’capacity is optimised, evacuation will improve. At Jharsuguda–Sardega line (Odisha),rake-loading will increase. The East Corridor in Chhattisgarh linking Kharsia-Dhananjaygarh is expected to become operational soon. All these measures will bring net addition to our loading. We are setting up new sidings and Rapid Loading Systems also.

G oing forward, what will be coal’s position in India, especially with govt. stress on renewables?

Presently, as base fuel for power generation, coal is the ready answer in India. Around 73% of the power generated is coal-based. Till alternative renewable energy sources come up in a big way, coal-fired power generation will continue to meet India’s electricity demand. Amid fast-expanding energy needs, the nation is exploring shift from being a largely fossil-driven energy economy to one that is powered by clean and renewable energy especially solar. This is a welcome step. I feel renewable energy sources, at this juncture, have a supplementary role and cannot substitute coal as energy contributors. Renewables and coal have to co-exist for some time before renewable can significantly contribute to a larger share of India’s energy basket. At some point of time in future, this is bound to happen but till such time coal remains the dominant source.

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