Coal news and updates

Coal India is planning to ramp up domestic production to meet the fossil fuel requirement of thermal power producers.

 

"The planned coal-based thermal capacity expansion is likely to put pressure on coal resources," Coal India's interim chairman Gopal Singh said while addressing the shareholders at the company's annual general meeting here today.

 

"In 2012, coal-based power generation capacity was 125 gigawatt (GW). This is likely to go up to more than 330-441 GW by 2040," he said.

 

"The demand for these power plants is likely to be first met by domestic coal, which will require quick exploitation of our reserves," Singh said.

 

 

According to estimates, the country had been able to save Rs 25900 crore in foreign exchange over the past three years by cutting down coal imports. "Import dependence in oil and gas is understandable given the poor reserves we have. But dependence on imported coal, particularly non coking coal, is something that can be addressed by quick exploitation of domestic coal reserves," Singh said.

 

Imports contributed 25 per cent of coal supply in 2015-16 and 23 per cent in 2016-17.

 

According to Singh, the share of coal in the country's commercial energy supply was 55 per cent in 2015-16 and is expected to remain high at 48-54 per cent even in 2040.

 

Singh said the public sector miner needs to achieve a double-digit growth rate in order to meet the production targets. The company produced 554.14 million tonnes of coal in 2016-17, while coal off-take was 543.32 million tonnes during the same period.

 

Diversification drive

 

Betting on the core competence in mining, the coal behemoth is planning to foray into mining of iron ore, bauxite, copper and nickel.

 

Coal India sources said the modalities are being worked out and could involve mining of assets overseas as well.

 

GST impact

 

On the impact of the goods and services tax (GST) on Coal India, director (finance) C.K. Dey said, "we have estimated that on an average, the reduction in rate on local sales is about 5 per cent and on inter-state sales the rate of reduction in taxes is about 3 per cent. This will give an advantage to customers to the tune of Rs 6,000 crore (annually)".

 

He said the state-run miner is facing an inverted tax structure under the GST regime as its output is taxed at a lower rate while inputs are taxed on higher rates.

 

"Coal has been made taxable at 5 per cent in the GST regime while taxes are raging between 18-28 per cent on our inputs. Our output is taxed at 5 per cent while out inputs are taxed at higher rates. This is a kind of an inverted tax structure and going forward, this will lead to refund situation," he said.

 

Source: Theelegraph