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Informist, Sunday, Aug 4, 2024

 

By Avishek Rakshit

 

KOLKATA - Coal India Ltd is targeting a substantial jump in coking coal revenues, to 400 bln rupees over the next six years, from its subsidiary Bharat Coking Coal Ltd, by increasing production and asking to company to diversify into coal gasification projects besides improving the quality of coal produced. 

 

Coking coal is priced around 3,200 rupees a tn compared to the average coal price of 1,600 rupees a tn. Coal India's thermal coal is priced around 1,500 rupees a tn. Coking coal, therefore, is a key revenue generator for Coal India. Shares of Coal India ended 3% lower at 524.6 rupees on the National Stock Exchange on Friday.     

 

The Maharatna company's subsidiary, Bharat Coking Coal, which is headed towards listing on the bourses, is its only subsidiary that is engaged in the business of mining coking coal and is the country's largest coking coal miner. Coking coal or metallurgical coal, is used to produce coke, the primary source of carbon used in steelmaking. 

 

"Our target is to generate 100 mln tn of coking coal by 2030, it would generate 400 bln rupees of revenue," Samiran Dutta, chairman and managing director of Bharat Coking Coal told mediapersons here today.

 

For the financial year ended March, the company's revenues were at 132.2 bln rupees and for 2022-23 (Apr-Mar), they were 123.3 bln rupees. The net profit was 15.6 bln rupees in the last financial year, and 6.6 bln rupees in the year before that. In the fiscal year 2023-24, it was for the first time that Bharat Coking Coal gave a dividend to parent Coal India.

 

By April 2026, the company plans to have a production of 50 mln tn from the current 41 mln tn. "This (financial) year we are targeting to produce and sell 45 mln tn of coking coal. If e-auction prices remain as they are, and our targeted sales of washed coal is met, then we can earn a revenue of 200 bln rupees," Dutta said. 

 

Bharat Coking Coal is expected to invest around 30 bln rupees more starting this financial year till 2029-30 to reach its aim of 400 bln rupees revenue. The company has already invested 14 bln rupees in the last financial year.

 

The revenue driver, Dutta said, will be higher production, sales of washed coal, and diversification. Bharat Coking Coal has come up with a tender model to reopen its four washeries--currently in a dilapidated condition--by roping in other companies. The company has a total of seven washeries with a cumulative production capacity of 7 mln tn. Under the tender model, Bharat Coking Coal will offer consumers the option to take over control of a washery if the consumer agrees to buy a minimum of 2 mln tn of coking coal. 

 

"We will come up with tenders for each of these washeries to select the company. Under the auctions, the washery will go to the company that agrees to buy the maximum coal from us," Dutta said. Bharat Coking Coal will only provide the land, and get requisite licences, while the company that wins the bid for the washery, will rebuild it.

 

Dutta said Bharat Coking Coal is also setting up two new washeries itself. The first one is expected to come up by the end of August and the second will take some more time. Washed coking coal, which has much less ash content, is priced at 12,000-14,000 per tn, as compared to the usual non-washed coking coal price of 3,200 rupees a tn.

 

Dutta said the first tender for washery will be floated by August end, and tenders for the other three washeries will be floated by August 2025. The company is also optimistic of generating revenues from its coal bed methane project, which is jointly owned by it and Prabha Energy, a Gujarat-based private company. Bharat Coking Coal has a 10% share from commercial sales of coal bed methane gas. The remaining the revenue will go to Prabha Energy. Coal India has also asked Bharat Coking Coal to set up solar power projects and it is set to commission 45 MW of solar power capacity.  End

 

Edited by Vandana Hingorani

 

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