Coal India can cross 550 MT output target: Coal Secy

If first quarter's production is anything to go by, then the coal behemoth can very well surpass the FY16 production target, says coal secretary Anil Swarup. The offtake which slows down during the monsoon months, will see a pick-up in subsequent months that will enable the company to maintain its pace.  Swarup has set an ambitious one billion MT production target for Coal India by 2022. However, evacuation of produced coal is as important as production. To facilitate evacuation, three major railway lines are under implementation stage right now, Swarup said. Below is the transcript of Anil Swarup’s interview with Latha Venkatesh & Reema Tendulkar on CNBC-TV18. Latha: Some colour on the Coal India production numbers going ahead. In August the uptake had been strong but that was what 9 percent higher. Are we on track to reach the FY16 growth target that you have set of 550 million tonne. A: Indeed, I think we are well on track to achieve this target of Rs 550 million tonne. If everything goes right probably we will be able to cross it as well. In the month of July and August normally because of the monsoons, the offtake is not so much because of the flooding of the mines. Thereafter, I think it will pick up. In the first quarter, as you are aware, the growth was about 12.3 percent over the previous year and previous year itself was a record production. We had an incremental production of 32 million tonne as compared to the cumulative increase of 31 million tonne in the previous four years. So, the going as been good so far and we are hopeful that we should be able to keep up the pace. Latha: You were indicating at the conference that to meet your 2022 target of one billion tonne coal production a lot needs to be done as far as infrastructure, rake availability etc are concerned. You also indicated that the formation of three rail lines will facilitate this. Can you give us an idea of what is in the pipeline in terms of infrastructure facilities and any timetable? A: You are absolutely correct, the issue is not merely production of coal what is equally more important is to ensure that –that coal gets evacuated. In that context there are three major railway lines that are under implementation right now. One each in Chhattisgarh, Odisha and Jharkhand and the good news is that the Odisha line should be ready by July 2016, the other two lines by December 2017. We are looking much beyond these three railway lines which will evacuate about 200-300 million tonne. We are looking at another 60 odd projects to evacuate this coal, the incremental coal that will come through. The instrument through which it will happen is the joint ventures (JV) that we have set up between Coal India, IRCON and the concerned state governments; three joint ventures have been set up. They in turn will implement this project so we are hopeful that these projects will be ready as the coal production gets ramped up. Reema: Could you give us exact numbers so what would the growth look like year after year? For example FY16 you will see a 11.5 percent growth what would the growth in FY17 look like once the railway lines come on board? A: The production growth will be such that we reach one billion tonne. So, whereas this year we are looking at 11.50 percent a similar sort of growth in next two years but the last two years that is 2018-2019 and 2019-2020 the production will be ramped up because by that time we would have got these railway lines going. By that time we would have most of the mines going so it is in that sense a bit of back-ended. But we are quite hopeful that we should be able to get the mines ready as well as the evacuation ready to get this coal out._PAGEBREAK_ Reema: The issue now is not so much as coal production but the coal demand which seems to have completely dried up; losses of more than Rs 2 lakh crore, the power DISCOM are facing subdued demand. What would be the solution to that?

A: There is indeed some issue with the state electricity boards (SEBs) and the ministry of power is engaging with the state governments to set it right and we are quite hopeful that it will happen. This is a temporary phase as far as we are concerned. Whatever we have done so far in terms of coal is just the beginning. We will require lot more coal if the economy grows and it will grow at about 8 percent per annum, we will require the amount of coal that we have planned for. So we are very hopeful that the efforts that have been put in by the power ministry, the SEBs will come in shape and the demand will again come up.

We cannot actually plan on the basis of lack of demand at a point in time. Even now I think we are just able to meet the demand. The overall commitment of Coal India to variety of industry is around 900 million tonne so we still have a huge gap between what we have committed and what we are producing though the production has indeed gone up in 2014-2015 and this year as well. We will require growing at a much faster pace to keep pace with the requirement of coal in the country.

Latha: That point is taken three to five years down the line or may be even one year down the line but at this point in time the last core sector number showed coal output itself rather low - that is because we have this power situation looks dire. In July itself we understand that the national plant load factor has declined to 58 percent. That is the lowest in three to five years now. Do you think the power situation and hence the demand for coal improves any time soon?

A: What I was suggesting was that though yes, at this point in time there is a lack of demand but the effort that has been put in by the ministry of power, the engagement that they are having with the state governments we are very hopeful that this demand will go up.