With little less than two months left till the completion of financial year 2023-24, Coal India plans to step up production from the second half of February in a bid to achieve the production target of 780 million tonnes (mt) target set for the year.
Coal India chairman P.M. Prasad in an interview with Pinak Ghosh from The Telegraph outlines the strategy for production, the immediate headwinds, long-term plans to increase availability of coking coal, the need for expanding washeries and plans to utilise a combination of rail and sea routes for transportation.
Coal India’s production for April-January 2023-24 was 610.3mt. The aim is to reach 780mt, which means an additional production of 169.7mt in February and March 2024. Can Coal India achieve and surpass the target?
Our year-on-year production growth is 10.8 per cent and the aim is to sustain it at that level. We sailed past the 600mt production mark on January 28, which is 24 days ahead compared with 2022-23. All our subsidiaries are surging ahead with positive growth and striving to maintain the tempo.
Also, our production shifts into higher gear from the second half of February. So, the outlook is optimistic.
What would you say are the immediate headwinds that Coal India would have to navigate to achieve the target production?
In 2022-23, we breached 700mt production for the first time achieving 703mt. The volume jump in a single year was an exceptional 81mt. Excelling such a large base is in itself a big challenge. Yet, we are on the course. Our perennial headwinds are land possession a faster environment and green clearances. There has been considerable headway but more progress is required on this front. We are also sorting our transportation logistics with Railways.
The coal ministry has a vision to take coking coal production in India to 140mt by 2030. What is Coal India’s current production of coking coal? What is the production plan for raw coking coal by 2030 and what steps would be needed to achieve this goal?
There has been a growth of around 11 per cent in CIL’s coking coal production this financial year till now. CIL as a whole produced 46.3mt (till January 24) of coking coal with a 4.5mt increase over a similar period last year. There is an aspirational target of 105mt coking coal output by 2029-30.
BCCL and CCL account for almost the entire CIL’s coking coal production. We would plan to ramp up the production from these two companies. ECL and SECL chip in with minute quantities.
We are revisiting 34 discontinued underground mines to unearth their locked-up coal assets. LoA has been issued for 17 mines with 27.5mt per year capacity, which would contribute from 2025-26 onwards. Others are in progress.
Coal India’s washed coking coal supply to the steel sector was only 2.15mt in 2022-23. What has been the supply in 2023-24? Why is the supply of washed coal so low? In that context, how feasible is the decision to set up more washeries?
Washed coking coal supply was 1.73mt (till January 27). Though India is endowed with significant coal reserves, when it comes to coking coal, good-quality resources are scarce. There has been a gradual depletion as most of the prime coking coal has been mined out and the remaining available grades need to be more amenable to washing with techno-economically feasible results.
Barring three new washeries which were commissioned between 2018 and 2023, most of the older ones are decade old and past their utility life. While on one hand coking coal production has increased, the washing capacity has come down due to ageing plants.
To enhance the washing capacity of coking coal for the steel industry, CIL is augmenting capacities by introducing new washeries, renovating the existing ones and monetising some of the older ones. By 2029-30, under the current plan of capacity expansion, CIL will produce 10mt of washed coal per annum at 18 per cent ash percentage. Of the 11 new coking coal washeries planned, three have been commissioned. Eight more are in the pipeline of which two are under construction and the rest are in various stages of progress.
There is a lot of emphasis from the coal ministry to promote rail-sea-rail routes for transportation. What initiatives are being planned by Coal India in this regard?
An inter-ministerial committee with members from ministries of coal, power, ports, shipping and waterways including Coal India, Paradip port and MCL is looking into a long-term prospective plan for the movement of coal through ports.
The committee has come up with a slew of recommendations which include railways to consider total distance, combining the first- and second-leg transport distance as one for freight charges, and enhancing infrastructure connecting source and destinations to port.
The evacuation mode through this route is expected to increase by 2029-30. Dispatch of coal through ports till December 2023-24 was 32.3mt with the bulk of it, about 27mt, moved through Paradip Port by MCL.
