Coal India set to join `1 lakh-crore league

This elite Indian club now has only 8 members — ONGC, Indian Oil Corporation, Bharat Petroleum, Hindustan Petroleum, Reliance Industries, State Bank of India, Tata Steel and Tata Motors

State-controlled Coal India Ltd (CIL) is poised to join the league of companies with `100,000-crore turnover this fiscal, its chairman Narsing Rao said. “We achieved a turnover of `88,281 crore during 2012-13 and hope to achieve a 12-13% growth. I am confident we will easily cross the `100,000-crore turnover during 2013-14,” Rao said. There are only eight companies in India that are in the `100,000-crore club: Indian Oil Corporation, Reliance Industries, Bharat Petroleum, Hindustan Petroleum, Tata Motors, State Bank of India, ONGC and Tata Steel.

However, when it comes to net profit, CIL is the fourth largest after ONGC, RIL and SBI, with the Kolkata-based company registering a net profit of `17,356 crore during 2012-13. “We will produce around 482 million tonnes of coal this year and sell around 492 million tonnes. With prices rising by about 4.7% during last month, we hope to surpass `100,000-crore mark,” a senior CIL official said.

Coal India is, in fact, one of the largest PSUs that repays heavily to the states from where it operates. This is for the second successive year that the company has paid more than `30,000 crore to the exchequer.

During 2012-13, the coal major’s payment to the exchequer — both Central and eight coal-producing states — was around `35,800 crore in the form of royalty and cess on coal, a slew of other taxes and duties, corporate tax, and dividend and dividend tax as against around `30,000 crore it contributed in 2011-12. Among the Central PSUs, Coal India is one of the highest contributors to the government exchequer and possibly among the top three.

Of the total cash outflow to the government exchequer in the fiscal ending 2013, CIL paid around `23,800 crore directly to the Central government. Apart from direct contribution, CIL also plays a role in freight revenue earning of the Indian Railways. During 2012-13, there has been an increase of 21 million tonnes in coal despatches through railways.

Coal dispatches rose to 251 million tonnes in 2012-13 from 230 million tonnes in fiscal ending 2012, registering a growth of over 9%. Around 30% of freight revenue of the Indian Railways comes from CIL.

CIL objects as govt seeks guards for explosives

Meanwhile, in a move set to further hit coal production, Coal India has been told it will have to use armed guards and coordinate with the local police and district administration each time it sends out detonators to its mines to prise out coal rocks.

This will mean a huge logistical exercise for which Coal India Ltd (CIL) has little expertise. With CIL Chairman S Narsing Rao expressing fears of a serious impact on coal production, the Coal Ministry has asked the Union Home Ministry to defer the implementation of the orders by at least six months till a satisfactory arrangement is worked out.

The Nagpur-based Petroleum and Explosives Safety Organisation sent out a circular on April 30 directing all manufacturers, sellers and users of explosives, including CIL, to have armed guards present whenever they transport explosives. In addition each company has to keep informed superintendents of police and the administration of each district through which the explosives are being transported, before any truck leaves a godown.

Failure to do this could lead to suppliers forfeiting their licence under the Explosive Rules, 2008. In a letter last month to the Coal Ministry, the CIL Chairman said the directive would hit CIL and its subsidiaries on a day-to-day basis, pointing out that explosives are very critical for coal production.

Each working day, CIL and its subsidiaries send out over `3 crore of explosives to their mines. In a year CIL buys over `800 crore of explosives, which means about two lakh tonnes of all range of detonators, making it the largest buyer of explosives in the civil sector in the country.

Rao has noted that after the directive, CIL’s current suppliers of explosives have stopped consignments fearing cancellation of licences. The company estimates that the delays in working out the logistical exercise may shave off several million tonnes in coal production this year. The target for CIL in 2013-14 is 475 million tonnes. It has missed its target for the past three years by a wide margin.

The Home Ministry, however, has reasons to be cautious. Maoist as well as other outfits in the politically troubled coal-rich states has been known to poach the ammonium nitrate-based explosives.

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