Coal news and updates

S Narsing Rao, CMD, Coal India  clears the accusation against the company by global activist group Greenpeace India stating that the coal reserve reported by the company in 2010 were in line with global standards.   

 

 

 

Every year since 2011, the company has been adding more than 2.2 billion tonne of coal reserve each year and will continue adding more reserves as it keeps developing new mines, says Rao. ( Read More )

 

 

 

The company's production target for FY14 is 482 million tonne the coal offtake target is 492 million tonne, both of which Rao says are achievable. “As we have 57 million tonne of ground stock as on April 1, we will be able to liquidate some 15-20 million tonne. We targeted 10 million tonne. If there will be any shortfall in some companies, we will make up that from the ground stock,” says Rao in an interview to CNBC-TV18.

 

Below is the verbatim transcript of S N Rao's interview on CNBC-TV18

 

 

 

Q: The Greenpeace pointed out that Coal India has failed to make certain disclosures regarding its reserves, to the stock exchanges at the time of its 2010 listing. Can you give us more clarity on this?

 

 

 

A: The reserve as we reported in the red herring prospectus in 2010 has been 22.338 billion tonne as per the Indian standard procedures (ISP) and that is the system at this point in time. 

 

 

 

We have converted that into partly internationally accepted norm, which was reported as 18.863 billion tonne. However, government has decided to migrate to United Nations Framework Classification (UNFC) code which is an internationally followed system. So, we did that on April 1, 2011, it was 18.21 billion tonne, which was as on that particular day but every year we are also adding around 2.2-2.3 billion tonne which is a dynamic thing and continues to go on.

 

 

 

Q: There is a lot of talk with respect to the buyback and dividend, any communication from the government on this issue?

 

 

 

A: No. I have no communication on that nor am I in a position to publicly state anything. It is the board that decides. If at all they decide to take up any particular decision. So, I don’t think it is appropriate for me to say anything publicly.

 

 

 

Q: How many fuel supply agreements (FSAs) have you signed, how many are pending and how much are you targeting to import in FY14 to meet all your FSA commitments?

 

 

 

A: The numbers keep on changing. I believe it’s between 150 and 155 against 173. But all of them are not eligible and ready to take coal. Therefore, it is all according to me a theoretical exercise at the moment. What is practical is that for about 40,000 MW of the total 60,000-78,000 MW is to be signed and is up and running. They have signed FSAs and power purchase agreements (PPAs); they are eligible and are drawing coal. 

 

 

 

What matters today is that 40,000 MW customers as and when they commission, they have PPAs, they are able to draw coal, that would be there. So, FY2013-2014 our earlier estimate was maybe in the range of 6-10 million tonne but that is all estimates. However, first six months are over. We don’t have any specific requirement from customers asking us to import. But we expect some requisitions in the second half of the current financial year. How much? I cannot say.

 

 

 

Q: What are the outstanding receivables from NTPC  at the end of Q1, how much has been received from them and isn’t it a matter of concern that NTPC is considering this now as a contingent liability rather than as a payable?

 

 

 

A: Yes, it is a matter of concern .We are discussing with them and sorting out the issue. By the end of Q1 it was Rs 4,200 crore payable to us. Only Rs 150-200 crore was disputed. We did tell the NTPC to settle sooner than later. So, it is definitely a concern because so much of outstanding payment is a matter of concern to us. 

 

 

 

Q: What about coal production and your dispatch guidance, where does it stand? It was set between 480-490 million tonne in FY14, is that an achievable target because your subsidiaries Northern Coalfields Limited (NCL) and Mahanadi Coalfields Limited (MCL) both miss their targets in April to August period?

 

 

 

A: Our production target is 482 and coal off take is 492. So, there could be some shortfall here or there in the production but our guidance remains as far as coal off take is concerned, we are very confident that we will achieve 492 million tonne at the end of the year. Because we have 57 million tonne of ground stock as on April 1, we will be able to liquidate some 15-20 million tonne. We targeted 10 million tonne. If there will be any shortfall in some companies, we will make up that from the ground stock.

 

 

 

Q: If you are depending on inventory liquidation then will you get support from the railways? What is the rake availability scenario or what was it in September and what is the asking rate for the balance of FY14?

 

 

 

A: Yes, for September it’s about 184-185 availability and we are really satisfied. By and large, there is no shortage of rakes. But certainly the second half will be very challenging. Our requirement will be plus 210 rakes per day in the coming days. So that is a challenges and also lots of challenges in terms of transporting coal.

 

 

Source: moneycontrol