India’s SCCL targets 8% coal production growth in 2019/20

 Indian coal miner, Singareni Collieries Company Limited (SCCL) has set a coal extraction target of 70 million tons for the 2019/20 financial year.

The target is 8% higher than coal produced during 2018/19 at 64.4 million tonnes, SCCL chairperson, N Sridhar, said.

Reviewing the of the company during the last financial year, he said that SCCL has achieved its highest growth in production and dispatch at 4% and 5% respectively, enabling the company to net its highest-ever sales revenue of $3.74 billion during 2018/19.

Part of the growth in coal dispatch could also be attributed to the higher number of rakes made available by state transporter Indian Railways, enabling SCCL to load 12 372 rakes during the year, up from 10 442 rakes loaded in the previous year.

According to Sridhar, the global cost of coal production is coming down owing to more efficient use of electricity and higher capacity utilisation of heavy machinery. This will lead to higher volumes of cheaper imported coal availability in the domestic Indian market and hence it is necessary for government coal miners to improve their cost competitiveness to compete with imported coal.

The target to ramp up production by 8% in the current year will be riding on SCCL’s capital expenditure corpus of an estimated $1.40 billion that the miner aims to spend over the next five years. Of the corpus, the amount to be spent in the current financial year is yet to be announced by the company.

A significant incremental production is expected to come from the company’s new blocks outside its traditional operational hinterland of the southern Indian province of Telengana.

SCCL has already bagged the Naini coal block in the eastern state of Odisha and is seeking another six coal blocks in Odisha and Chhattisgarh. Once all these blocks are bagged and operationalised, the miner’s goal will be to take its production to about 100-million tons over the next few years, company officials said.

Even as the miner is eyeing coal blocks outside its traditional operational hinterland, the Telengana government has assured SCCL that it will facilitate the opening up of at least 48 new mines within the state over the next few years, the officials add.

SCCL is a joint venture of the Telengana and Indian governments with the former holding 51% equity and the balance vested with the federal government. 

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