Kolkata, Sep 21 (IANS) Coal India Ltd (CIL), which produces 84 per cent of the country's coal output, "needs to step up to a double-digit growth rate" to meet its production targets, company Chairman Sutirtha Bhattacharya said on Wednesday.
"Going forward, in order to meet the production targets, Coal India needs to step up to a double-digit growth rate from that of around 9 per cent achieved in FY2016. During the first four months of FY2017, Coal India's production growth was more than 6 million tonnes (MT) over the same period last year," he said while addressing shareholders at the company's 42nd Annual General Meeting here.
In 2015-16, the state miner produced 538.75 MT of coal against a target of 550 MT and its off-take stood at 534.5 MT.
Asked whether Coal India is revising its production target in view of low demand that the miner has been facing with, Bhattacharya said, "We expect the demand to pick up. There has been tepid demand. When the pick will happen, we must be ready with."
The company envisaged production of 908.10 million tonnes in 2019-20 with a CAGR (Compound Annual Growth Rate) of 12.98 per cent over 2014-15 production figures.
"Your company proposes to introduce a new technology for shallow depth investigation with high precision by utilising Ground Probing Radar system. Plans are on for introduction of gravity survey equipment for high depth basement studies of coalfields," Bhattacharya said.
During 2016-17, the coal production target has been pegged at 598.61 million tonnes with an annualised growth of about 11.6 per cent. In 2017-18, coal production is expected to be 660.7 MT with a growth of about 10.5 per cent.
He said the estimated geological resource of Indian coal stood at 306.59 billion tonnes as on April 1, 2015.
On the improvement of quality of coal, Bhattacharya said, "At present, your company has a total coal washing capacity of 36.8 MT per year through its 15 existing washeries and plans to set up 15 more washeries."
The state-run coal behemoth reported that its consolidated net profit dipped by 14.78 per cent to Rs 3,065.26 crore in the quarter ended June 30, 2016, as compared to Rs 3,596.92 crore in the corresponding quarter last year.
Responding to shareholders' query about Goods and Services Tax (GST), he said, "We have engaged a consultant to review the possible impact of GST. Coal prices in West Bengal will come down as all the taxes, including the cess imposed by the state, will subsume to GST."
Its net sales for the quarter stood at Rs 17,796.05 crore, down 6.1 per cent from Rs 18,955.75 crore in the year-ago period.
The miner produced 125.67 million tonnes of coal in April-June quarter of the current fiscal against a target of 132.43 MT, achieving 95 per cent of the production target set for the quarter. However, its production grew by 3.56 per cent in the period as compared to 121.35 MT produced in the corresponding period last year.
CIL's off-take stood at 133.24 million tonnes in the quarter that ended June against a target of 149.88 MT. Its off-take grew by only 2.98 per cent in the quarter as compared to off-take of 129.39 MT in the year ago period.
In its latest annual report, the company said it would invest Rs 7,765 crore as capital expenditure and Rs 5,069 crore in various other projects in 2016-17.
"One of the major components of the capital expenditure (capex) is the expense on land acquisition. If the land values are getting revised by state governments, capex may require a revision," he said.
