Coal India Ltd has signed the Fuel Supply Agreement (FSA) with NTPC Ltd after prolonged negotiation and assured the power PSU of supplying nearly 115 million tonne of coal during the current financial year.
The FSA which has provision for both penalty and bonus clause has fixed a trigger level of 90 per cent. If CIL failed to supply below 90 per cent of actual quantity the company would pay a penalty of 10 per cent of the value of the coal shortsupplied. Similarly, NTPC or power utilities would pay a penalty of 10 per cent. If they were unable to lift coal below 90 per cent.
Coal India chairman Partha Sarathi Bhattacharyya said that the agreement was fair to CIL and power generating companies and it is a ‘win-win’ situation for both sides.
Bhattacharyya said that as per the Annual Action Plan (AAP) target, the company has earmarked 313 metric tonne of coal for the power sector during 2009-10 and it was agreed at the meeting with the CEA that the public sector power Plants across the country would get 306 MT of coal during the year. The remaining seven MT of coal would be reserved for the new power stations which would be commissioned during this fiscal.
CIL has already signed FSA with coal consuming companies in other sectors like cement, glass etc.
Coal production: CIL chairman said that during 2008-09, CIL has achieved 99 per cent of the target by producing 403.73 mt of coal during the year. The company had set a target of 405 mt of production.
He said that the marginal shortfall was due to delay in forestry clearance which had put hurdles in some new projects coming into production during the year.
For 2009-10, CIL has fixed a production target of 435 MT and the company hoped to cross 500 MT of coal production by 2011. Bhattacharya said that despite best efforts by CIL, there would be a demand-supply gap of 230 mt during the 11th plan period since the demand would be around 750 mt against the supply of 520 MT. Import was necessary but it could not meet the entire gap. The development of coal blocks allocated to various coal consuming companies was crucial in this respect.
Among the CIL subsidiaries, South Eastern Coalfields, Northen Coalfields and Western Coalfields had surpassed their targets and this had made up a shortfall to the Extent of 9.20 mt by other subsidiaries like Eastern Coalfields, Bharat Coking Coal Ltd, Central Coalfields, Mahanadi Coalfields and North Eastern Coalfields Ltd, he said.
Profit margin: Bhattacharyya said that during 2009-10, Coal India would have made a PBT of over Rs 12,103 crore as against Rs 8,738. 46 crore in 2007-08, but due to the impact of revision of wages and salaries of its workers and executives, the PBT has come down to Rs 4,238.58 crore. The impact on account of pay revision was estimated to be Rs 5,410.48 crore in addision to actuarial liability of Rs 2,454.25 crore. CIL has paid a dividend of Rs 1,705.42 crore to Government of India during 2008-09 in addition to payment of tax to the tune of Rs 4,142 crore.
Referring to coal sales realization, he said that upto March 31, 2009, it was Rs 47,031 crore for the year 2008-09 while coal sales dues stood at Rs 2,046 on March 31, 2009.
He said that coal sales through e-auction platform has increased sharply during 2008-09. The total quantity allocated during the year through online bidding increased by 69.7 per cent to a level of 48.8 MT from the previous year’s 28.79 MT.
CIL chairman also informed that the company was planning to increase prices of coal to set off the impact on account of the hike wages and salaries. “Without the price increase, we cannot take up new projects. 33 new projects have already become unviable. The company’s growth will also be affected.”
Bhattacharyya, however, declined to indicate the quantum of price rise saying that it would be minimum. Turning to IPO, he said that some initial discussions have taken place on this issue, although no concrete decision was taken as yet. He said that instead of divestment by the government, issuing fresh shares would be a better route. CIL which has achieved the Navaratna status in October last was scheduled to get listed within three years. Bhattacharyya hinted that the listing would be done as early as possible.
Coal JV with NTPC: CIL would sign a JV agreement with NTPC Ltd for mining of coal and setting up a power plant at Brahmani coalfield in Jharkhand.
NTPC chairman RS Sharma said that the agreement would be signed by the two companies this month for setting-up a 4,000 mw power plant.
Brahmani block has a reserve of 1.1 billion tonne. An investment of around Rs 22,000 crore would be required to set up the power station and another Rs 1,500 crore would needed for mine development.
“We will appoint merchant bankers to do the due diligence for Indonesia and Mozambique coal mines that we identified,” NTPC CMD RS Sharma told reporters.
“The coal mines would be acquired by the company and not by the consortium—International Coal Ventures Limited, formed by five PSUs for this purpose,” he added. International Coal Ventures Ltd was formed by five public sector companies to acquire coal blocks overseas. These five companies are Steel Authority of India, NTPC, Rashtriya Ispat Nigam, National Mineral Development Corporation and Coal India.
The FSA which has provision for both penalty and bonus clause has fixed a trigger level of 90 per cent. If CIL failed to supply below 90 per cent of actual quantity the company would pay a penalty of 10 per cent of the value of the coal shortsupplied. Similarly, NTPC or power utilities would pay a penalty of 10 per cent. If they were unable to lift coal below 90 per cent.
Coal India chairman Partha Sarathi Bhattacharyya said that the agreement was fair to CIL and power generating companies and it is a ‘win-win’ situation for both sides.
Bhattacharyya said that as per the Annual Action Plan (AAP) target, the company has earmarked 313 metric tonne of coal for the power sector during 2009-10 and it was agreed at the meeting with the CEA that the public sector power Plants across the country would get 306 MT of coal during the year. The remaining seven MT of coal would be reserved for the new power stations which would be commissioned during this fiscal.
CIL has already signed FSA with coal consuming companies in other sectors like cement, glass etc.
Coal production: CIL chairman said that during 2008-09, CIL has achieved 99 per cent of the target by producing 403.73 mt of coal during the year. The company had set a target of 405 mt of production.
He said that the marginal shortfall was due to delay in forestry clearance which had put hurdles in some new projects coming into production during the year.
For 2009-10, CIL has fixed a production target of 435 MT and the company hoped to cross 500 MT of coal production by 2011. Bhattacharya said that despite best efforts by CIL, there would be a demand-supply gap of 230 mt during the 11th plan period since the demand would be around 750 mt against the supply of 520 MT. Import was necessary but it could not meet the entire gap. The development of coal blocks allocated to various coal consuming companies was crucial in this respect.
Among the CIL subsidiaries, South Eastern Coalfields, Northen Coalfields and Western Coalfields had surpassed their targets and this had made up a shortfall to the Extent of 9.20 mt by other subsidiaries like Eastern Coalfields, Bharat Coking Coal Ltd, Central Coalfields, Mahanadi Coalfields and North Eastern Coalfields Ltd, he said.
Profit margin: Bhattacharyya said that during 2009-10, Coal India would have made a PBT of over Rs 12,103 crore as against Rs 8,738. 46 crore in 2007-08, but due to the impact of revision of wages and salaries of its workers and executives, the PBT has come down to Rs 4,238.58 crore. The impact on account of pay revision was estimated to be Rs 5,410.48 crore in addision to actuarial liability of Rs 2,454.25 crore. CIL has paid a dividend of Rs 1,705.42 crore to Government of India during 2008-09 in addition to payment of tax to the tune of Rs 4,142 crore.
Referring to coal sales realization, he said that upto March 31, 2009, it was Rs 47,031 crore for the year 2008-09 while coal sales dues stood at Rs 2,046 on March 31, 2009.
He said that coal sales through e-auction platform has increased sharply during 2008-09. The total quantity allocated during the year through online bidding increased by 69.7 per cent to a level of 48.8 MT from the previous year’s 28.79 MT.
CIL chairman also informed that the company was planning to increase prices of coal to set off the impact on account of the hike wages and salaries. “Without the price increase, we cannot take up new projects. 33 new projects have already become unviable. The company’s growth will also be affected.”
Bhattacharyya, however, declined to indicate the quantum of price rise saying that it would be minimum. Turning to IPO, he said that some initial discussions have taken place on this issue, although no concrete decision was taken as yet. He said that instead of divestment by the government, issuing fresh shares would be a better route. CIL which has achieved the Navaratna status in October last was scheduled to get listed within three years. Bhattacharyya hinted that the listing would be done as early as possible.
Coal JV with NTPC: CIL would sign a JV agreement with NTPC Ltd for mining of coal and setting up a power plant at Brahmani coalfield in Jharkhand.
NTPC chairman RS Sharma said that the agreement would be signed by the two companies this month for setting-up a 4,000 mw power plant.
Brahmani block has a reserve of 1.1 billion tonne. An investment of around Rs 22,000 crore would be required to set up the power station and another Rs 1,500 crore would needed for mine development.
NTPC to engage bankers to acquire overseas coal mines
State-run NTPC said it would appoint merchant bankers next month for acquiring coal mines identified by the company in Indonesia and Mozambique.“We will appoint merchant bankers to do the due diligence for Indonesia and Mozambique coal mines that we identified,” NTPC CMD RS Sharma told reporters.
“The coal mines would be acquired by the company and not by the consortium—International Coal Ventures Limited, formed by five PSUs for this purpose,” he added. International Coal Ventures Ltd was formed by five public sector companies to acquire coal blocks overseas. These five companies are Steel Authority of India, NTPC, Rashtriya Ispat Nigam, National Mineral Development Corporation and Coal India.
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