Coal India to venture into metals mining

Coal India has planned to enter the metallurgical mining sector and has narrowed down on iron, copper, bauxite and nickel as the primary metals.

While a blueprint is being worked out, Chairman Gopal Singh has said that metal mining won’t hamper the targeted coal production of one billion tonne by 2020.

“Mining is the same whether it is coal or iron or other metals," he said on the sidelines of the company’s 43rd annual general meeting, adding “essentially mining remains our strength”.

The company is on the lookout to acquire mines in India and Africa for the new vertical.

A company official said that the company was likely to mine as well as sell the ores on its own and a joint venture was unlikely in the immediate future. “We are in the process of identifying iron-ore and bauxite mines. We are also looking at acquiring copper and nickel mines. We are importing lot of iron-ore and spending a lot of foreign exchange," a Coal India official said.

Singh said, on account of increased coal production in the past three years, India was able to save Rs 25,900 crore as foreign exchange outgo.

Coal imports contributed 25 per cent of the total coal supply in 2015-16, which fell to 23 per cent in 2016-17.

“Energy accounts for around a quarter of the total value of imports in India making it imperative for the government to fulfil energy needs of the country independently and that too in a sustainable manner,” he said adding that “Coal production has increased substantially in the last three years, resulting in reduction in imports and foreign exchange savings of Rs 25,900 crore”.

During 2014-15, the company’s coal despatches stood at 490 million tonne (mt) which increased to 535 mt in the next fiscal year and further increased marginally by 1.5 per cent to 543 mt in the 2016-17 fiscal year.

Coal imports during 2014-15 stood at 217.78 mt and fell to 199.88 mt in 2015-16. During April 2016 to January 2017, coal imports reduced by 2.59 per cent as compared to the corresponding period of the previous year.

However, Singh cautioned that the imports might remain high unless domestic production picks up at a fast pace. Nevertheless, expecting thermal power-based electricity to remain the mainstay in the country's energy scenario in the country for the coming 30 years, Singh expects sales volumes to remain healthy owing to demand from the power stations.

Coal-based power generation capacity of 125 Gw in 2012 is likely to become 330-441 Gw by 2040. This year, power generation in the category is going to touch 192 Gw.

“The demand for these plants is likely to be first met by domestic coal, which will require quick exploration of our reserves and call for fuller resource assessment, optimum mining and efficient use,” he said.

In 2015-16, the share of coal in commercial energy supply was 55 per cent but is likely to dip to 48-54 per cent by 2040 as thermal and renewable energy’s contribution is likely to go up.

Nevertheless, Singh says coal demand is going to remain high.

Year-on-year, there was growth of 17 per cent in coal-based thermal power generation in August, while hydro power generation fell 12 per cent and nuclear power generation fell 36 per cent. Generation from other sources declined by seven per cent in the month.

Singh pointed to six areas the company needs to focus. One is the setting up of three railway links, to ease supply from Central Coalfields, Mahanaadi Coalfields and South-Eastern Coalfields. A second is acquisition of land for expansion of operations. Coal evacuation and availability of railway rakes has been a long pending concern with Coal India, the railways and consumers.

Recently, daily loading by Coal India rose to 250 rail rakes, of which 225 rakes went for power plants.

The company is also focusing on online and technological improvement. After putting in place an online monitoring system in 69 projects, Coal India will be implementing the technology in 67 more mines and is also putting in place an ERP system. Exploration capacity will be augmented with more use of hydrostatic drills, geophysical loggers and other technology.