Coal India Ltd (CIL) is focusing on reducing its production cost by improving productivity and efficiency and remains optimistic to be competitive even as the Central government is allowing commercial coal mining for the private sector, its chief said on Friday.
CIL is planning to increase its capital expenditure to Rs 9,500 crore in 2018-19 to strengthen its production capacity, Chairman and Managing Director Gopal Singh told reporters here.
“Allowing commercial mining is an opportunity for us. We have been the market leader and will remain so. We have been focusing on reducing cost and improving productivity and efficiency,” he said.
“Our target is to produce coal at a lesser cost than that of the commercial miners,” he said, adding the state-run miner achieved 10.9 per cent growth in its profit before tax during October-December period of current fiscal as because it managed to reduce cost of production by Rs 52 per tonne.
Singh also said its coal prices have been cheaper by 42-64 per cent compared to imported coal even after the price hike in January.
CIL would focus more on mechanisation and automation in a bid to increase its production, he said.
According to him, CIL has exceeded its planned capital expenditure by Rs 100 crore to Rs 8,600 crore in the current fiscal.
“Our capital expenditure would be Rs 9,500 crore to increase our capacity,” he said.
CIL produced 495.09 million tonnes (mt) during the April to February period of the current fiscal and it is expecting to close the year with a production of about 568 mt, against a target of 600 mt for 2017-18.
With a target to produce 531.32 mt during the eleven month period, it clocked a 1.4 per cent growth in production from 488.06 mt produced in the same period of 2016-17, its provisional data showed.
The state-run miner had achieved a seven per cent growth in off-take to 525.09 mt during the April-February period of 2017-18 as against a target of 541.60 mt set for the period. It had an off-take of 490.86 mt during same period of previous financial year (2016-17) and is expecting to achieve an off- take of 580.5 mt for the entire year of 2017-18.
Singh said the coal behemoth has achieved the highest off-take to the power sector to 454.30 mt with a 6.8 per cent growth in 2017-18 while its dispatch to non-power sector remains at 126.2 mt, seven per cent higher than previous year.
He is also hopeful of meeting the coal demand in next fiscal and its target to produce 630 mt in 2018-19.
“We will be ending the year with about 54 million tonnes stock,” he said.
Coal India is also planning to dispatch 155.36 mt of coal in the first quarter of 2018-19.
On the new coal pricing policy to be effective from April, 2018, Singh said the objective of the new policy is to make it transparent and the miner is consulting with consumers.
“We are holding meetings with consumers taking their views to make sure that it becomes full-proof. the pricing policy is based on gross calorific value of coal. This will be win-win for consumers, coal India and mine managers,” he added.