Coal mining firm Singareni Collieries Company Ltd (SCCL) is on an expansion drive. The 127-year-old company is planning to open about 20 new mines in the next five years with a capex of Rs 4,000 crore, which is part of an overall investment plan of Rs 20,000 crore earmarked for fresh acquisitions. Of this, 10 new projects will be opened up in the beginning of next financial year. It is targeting an average growth of 10% as against the earlier average growth of 3%. Talking to BV Mahalakshmi on its expansion plans, N Sridhar, CMD, SCCL, says that the coal production will be increased to 85 million tonne with the use of modern technology like longwall and continuous miners in the proposed mining projects. SCCL is jointly owned by the Telangana government and the Centre on a 51:49 equity basis. Excerpts:
What are the expansion plans in terms of production, despatch and investment?
SCCL has registered a record 15% growth in 2015-16. For the first time, we have reported Rs 1,020 crore net profit as against Rs 490 crore last year. This has led to an increase in turnover from Rs 14,000 crore to Rs 16,500 crore, registering a 17% growth.
Coal despatch has shown a growth of 11% this year as against an average growth of 3% in the last five years. With the demand set to increase for coal, we are planning a capex of Rs 20,000 crore for opening new mines. Currently, we have 47 mines which include 16 open cast (OC) mines and 31 underground (UG) mines. We have set a production target of 85 MT by 2020 with the use of better technology such as longwall and continuous miners. Keeping in view of the growth of Telangana, SCCL has planned this higher production for the next year to cater to the needs of power sector and other
industries.
What is the status on the thermal power plant in Adilabad district and its commercialisation plans?
Work on the power plant is at an advanced stage of operations. The first unit of 600 MW of the 1200 MW has been synchronised earlier this month and the second one will be completed in April. The commercial operations will begin in May 2016. This project will be able to supply 25 million units per annum and power would be available in Telangana at a cost of Rs 4.25 per unit as against the state buying at Rs 5.25 per unit through open market. With the commercial operation, the state can save about Rs 400 crore.
Can you detail the Adriyala Longwall project, which is the largest longwall mining project in Asia and the plan ahead?
In the history of underground mines, Adriyala Longwall produced record 2.2 million tonne and has set a target of 3 MT next year. Adriyala Shaft (Longwall) project at Godavarikhani in Karim Nagar district was set up with an overall outlay of Rs 1,000 crore. Incidentally, this project has a distinction of being the highest capital investment in mining projects of the company so far and is also the single largest under ground mine in terms of coal production capacity. The Adriyala project is having 54.36 MT of deep seated extractable coal reserves in five horizons. Besides, it has better technology for increased output. The proposed new mines would have shortwall, longwall and continuous miners and would be outsourced as per mine developer operator (MDO) model.
What are the immediate challenges in terms of competition and falling coal prices?
Two important things which we have to take care of are quality and prices without increasing the cost of production.
As coal is a free market commodity, price and quality have to be balanced besides increasing the production. We are also working on third party sampling system. The central government has set a target of one billion tonne by both Coal India and SCCL thereby reducing the burden of 200 million tonne of imported coal. The state has coal reserves for the next 50 to 60 years.
