Coal India, Indian Oil in explosive pact

Calcutta, Feb. 5: Coal India is setting up a joint venture with Indian Oil Corporation to manufacture bulk explosives used in open cast mining, which constitute 90 per cent of the PSU miner's production.

Coal India is likely to have a 50 per cent stake in the joint venture, which will become operational by March 2017.

The PSU is among the largest users of bulk explosives in the country, consuming about 5.5 lakh tonnes on an annual basis. In 2014-15, Coal India's total expenditure on explosives was Rs 1,541.48 crore, up 17 per cent over the previous fiscal.

Indian Oil supplies around 25 per cent of Coal India's total consumption of explosives, while the rest is sourced from private suppliers. Indian Oil has 12 bulk explosive manufacturing units, of which eight exclusively cater to Coal India's needs.

The explosive division was part of IBP, a company that was later merged with Indian Oil. Industry sources said Coal India was always keen on picking up a strategic stake in this business.

The memorandum of understanding for the joint venture was signed today. Indian Oil's bulk explosive manufacturing units will come under the new company.

Coal India sources said open cast mining would continue to remain a major source of production in the coming years as the miner gears up to reach an output target of one-billion-tonne by 2019-20.

As of March 31, 2015, Coal India operates 430 mines of which 227 are underground, 175 open cast and 28 mixed-use mines.

The PSU miner had been at loggerheads with private bulk explosive suppliers and approached the Competition Commission of India (CCI) with complaints of cartelisation. The CCI had imposed penalty on several private manufactures.

Mahanadi Coalfields

Coal India today said its arm Mahanadi Coalfields Ltd had declared an interim dividend of Rs 2,758.45 crore for 2015-16.

The company said its another arm Central Coalfields Ltd had declared an interim dividend amounting to Rs 1,457 crore for the nine-month period ended December.

"Mahanadi Coalfields Ltd (MCL) has declared an interim dividend of Rs 14,798.48 per share of a face value of Rs 1,000 each on 18,64,009 equity shares, amounting to Rs 2,758.45 crore on February 4, 2016 for the year 2015-16," CIL said in a filing with the BSE.

Indian Oil Corporation