Coal news and updates

FY14 production target to fall short by 8-10mt: Coal India

The state-run coal producer's CMD spoke with CNBC-TV18 on a host of issues such as production, regulations and the government's decision to set up a coal regulator.

After the Cabinet Committee of Economic Affairs (CCEA) last week approved the setting up a coal regulator, CNBC-TV18 spoke with the CMD of state-run Coal India S Narsing Rao to get his views on the development. Rao also discussed other issues relating to the coal sector such as a recent decision to allow mines of less than 8 million tonne to expand without local government permission and FY14 production for the company.

Below is the interview of S Narsing Rao, CMD of Coal India with Latha Venkatesh and Sonia Shenoy on CNBC-TV18 Sonia:

First you could just give you comments on the CCEA setting up a coal regulator in due course and what could the impact be for a company like Coal India?

I can't say exactly what the impact on Coal India will be because they are talking about guidelines, advice on sampling and on quality etc. So, when the price is to be determined by the Coal India board certainly it may be kind of an arbitration mechanism between us and the consumers. I don't think I have more than that at the moment to share with you

Will it not mean that some freedom to set prices may be curbed or on the contrary, will it be positive because there will be less litigation between you and your buyers?

On the freedom of pricing, I would say that even today, while there is freedom for the Coal India board to determine prices, we are generally careful about setting the prices because we never peg it with international prices. We keep in mind our product costs and the impact it would have on customers, particularly the power sector. So the board does it with a lot of responsibility – we don’t determine prices as we feel like.

The other major announcement that came from the government was that for mines up to 8 million tonnes per annum capacity, you don't have to take local government’s permission or local inhabitants’ permission for expansion.

Do you have many mines of that size and variety? And therefore is there going to be an impact on your output in next four quarters?

Yes, we are working on that. The government gave some dispensation in the middle of January. Essentially it reduces the time taken for getting the environment clearance. We still need to go to the environment ministry for clearance but as you said it dispenses with the public hearing. We are working on it. We should get a benefit in the range of about 45-50 million but it is early for me to say. By the end of March, we will submit our applications for enhanced clearances.

Can you just take us through some of your sales and production targets? Where does it stand at for FY14 because up until now in 10 months you have achieved about 386 million tonnes as far as the sales is concerned. How much may you end up achieving by the end of the fiscal?

We are staring at something 8-10 million tonnes of shortfall as on today by end of March, both in production and offtake. The performance in the next 36 days will determine whether it is 8 million or 10 million short.


Source: moneycontrol/ CNBC-TV18