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New Delhi: State-run Coal India Ltd (CIL) Chairman Pramod Agrawal has said that hitting the 1 Billion Tonne (BT) coal production target set for 2024-25 might not be realistically possible and the coal PSU is more optimistic about hitting the figure by 2025-26. During a recent investors' call conference on the Q1 results for FY 2022-23, Agrawal said that the company is likely to clock around 900 Million Tonnes (MT) of coal production by 2024-25 and increase it further to 1 BT by the next financial year. For the current financial year, Coal India is targeting 700 MT coal production.
"This year, I am quite hopeful of achieving the target of 700, but to achieve target by FY25, we need to produce about 840 next year and then increase it 1 billion the year after. I feel that may not be very realistic, realistically speaking perhaps by FY25, we will reach something higher than 900 million tonne, and the year after, definitely it will be achieved. If the demand is there, we will achieve the 1 billion tonne target," the CIL Chairman and Managing Director (CMD) told investors.
While stating that Coal India has so far been able to cater to the demand of the power sector successfully, the CIL Chairman said that the sector will continue to remain a priority for as long as there is high demand. He added that even though CIL has been getting a good 300 percent premium on coal sold under the e-auction route, it is not possible for the company to increase volumes under the auction regime. "If the demand of the power increases substantially, then our ability to do the e-auction reduces to that extent. Price as of now is still very high, and in certain cases, we are getting about 4,500 or even 300 percent of the premium," he told investors.
Currently, Coal India is allowed to auction up to 20 percent of its coal production through e-auction route. The consumers from regulated and non-regulated sectors and traders compete for coal under the various e-auction regimes, which allows market forces to lead to the discovery of prices.
However, allocation of coal under the window has been reduced, affecting supplies to the non-power sector massively as they form the bulk of consumers under this route. "See, we have to give priority to the power sector. There's no way in which we can ignore that priority. And hence, we had to reduce this quantum, but in the coming months as our production is likely to increase and the demand from power sector is going to reduce, I am quite hopeful that e-auction volume will increase further," said the CIL CMD.
Responding to a question on wage revision, the CMD said, "Last year, we have provided something like 900 crores last year we had provided for the wage increase. This year again we are providing Rs.150 crores per month, so 1,800 crores. Now we have provided 100 crores, and we will increase it in coming quarters, maybe in third quarter onward we'll increase.
"… we must understand that lot many people are retiring, and this is giving us some leverage. Like this year, again we are expecting that 12,000 to 13,000 people will retire. So, there will be an increase (after wage revision is implemented), there will be some impact, but the impact is not going to be very phenomenal. It will be something which can be managed and with the price increase due, it will not have any impact on Coal India's bottom line as well," said Agrawal.
He added that CIL has about 2,40,000-2,45,000 workers currently. About 5 percent of the workforce is reducing every year, said the CMD.
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