Coal India today said it remains firm towards achieving a double digit coal production growth despite muted demand and lower price realisation.
“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 nine per cent achieved during 2015-16,” Coal India Chairman Sutirtha Bhattacharya said at the AGM.
Asked whether one billion tonne coal production target by 2020 would be revised in view of the muted demand and lower price realisation, Bhattacharya replied in the negative.
In the quarter ended June 2016, the company posted 14.6 per cent lower profit compared to corresponding period last fiscal owing to lower realisation from coal sales.
During 2016-17, the coal production target is pegged at 598.61 million tonnes with a growth of 11.6 per cent while in the next year, production is expected to be at 660.7 million tonnes, expanding at 10.5 per cent.
Bhattacharya expressed hope that higher demand for the fossil fuel would be due to government schemes for discoms like Uday and power sector reforms but said ‘constraints’ in the price still remained.
He said stock at power plants has decreased to 25 million tonnes from 37 million tonnes as on March 31. The year had begun with a 93-day coal stock at the CIL and the power plants.
The capex needs to be geared up and has already firmed up Rs 7,500 crore for the current fiscal, he said. “The investment could be revised if land policy by states gets revised.”
The CIL chairman said its research and development expenditure will also go up and it was already working with a group of IIT for transformational projects which can become gamechanger like carbon to hydrocarbon.