Rising demand of coal due to power generation capacity addition in the country has alarmed the private as well as government bodies to ensure coal availability. Around 78% of our entire coal off-take is catered to power utilities in the country. India has an installed power generation capacity of 207,876 MW and plans to add around 88,573 MW during XII Five Year Plan (2011-12 to 2016-17). Keeping this in view, the state-run coal mining major Coal India Ltd has set an ad-hoc provision for acquisition of assets abroad at Rs 5,000 crores and Rs 25,000 crores for the current fiscal (2012-13) and XII Plan, respectively. CIL Chairman S Narsing Rao, shares his view with Power Today, on how CIL is promptly working on plans to enhance the coal supply in the country. The last three-four months were quite eventful for the energy sector, the government also seemed to be proactive on removing the hurdles hitting growth of PSUs and of the country as a whole. How do you see the future prospects in the energy sector, especially for fuel such as coal? There is little doubt of the fact that coal is the most dominant energy fuel in the country contributing to more than half of the country's overall primary energy consumption. The dominance of coal as the dependable energy fuel is unlikely to change in the foreseeable future. Infact, this was recently reinforced by the International Energy Agency's (IEA) 2012 World Energy Outlook report, which states that coal is set to surpass oil as the world's top fuel within a decade. The head of the IEA was quoted as saying that due to abundant supplies and insatiable demand for power from emerging markets, coal met nearly half of the rise in the global energy demand during the first decade of the 21st century. In the Indian scenario this is even more pronounced where, as I said, coal already accounts over 52 per cent of the Nation's primary commercial energy needs and is expected to grow further. India is expected to emerge as the second largest coal producing country in the world displacing USA. I venture to assert that the future of the energy sector in India is coal centric. Our advantage is that the country has a huge coal reserve base of around 293 billion tonnes of which the proved coal reserves are 118 billion tonnes. So, the role of coal in the future is secure. Yes, the government is helping in easing out the problems for increased coal production but still more is required to be done especially in providing green clearances and land availability. With increase in capacity addition of power generation and steel manufacturing, demand of coal has increased sharply, how has CIL planned to increase its production capacity? Predominantly our focus is to satiate the coal demand of the power sector which is coal dependent. Around 78 per cent of our entire coal off-take is catered to power utilities in the country. India has an installed power generation capacity of 207,876 MW and plans to add around 88,573 MW during XII Five Year Plan (2011-12 to 2016-17). Of this a major portion will be fuelled by coal. Steel is another important sector that basically uses metallurgical coal, that is, coking coal, reserves of which unfortunately are limited in our country. So, the immediate need of the hour is to increase coal production and coal off-take as well. For this, the company has set into motion a multi pronged action plan. Steps are on to increase efficiency levels in operations and those of the machines. Reducing the downtime of the equipment and increasing their availability is another aspect that is assiduously pursued for increased coal production. Pursuing Mine Developer and Operators (MDO) route is another step, which would supplement coal production expeditiously. Opening more under ground mines is another measure, along with increased mechanisation in the existing mines for ramping up production through UG mines. The company is also strengthening infrastructure facilities at sidings for quicker loading. Ideally CIL is in a position to perk up its production by 100 MTs if rail connectivity is created at three of its major fields in Jhakhand, Odisha and Chattisgarh. CIL is even geared up to fully fund the laying of tracks. If these strategies are translated into reality, for which the company is diligently working, the demand supply gap can be narrowed down to a large extent. How many overseas subsidiaries are going to share the domestic supply? To shore up the country's growing coal demand Coal India was keen to acquire mining assets abroad but honestly there was not much headway in this direction. However, in our first acquisition abroad through our fully owned subsidiary Coal India Africana Limitada, we own two mining blocks in Mozambique where the first phase of exploration and drilling had already commenced. The demand-supply gap in coal is widening in the country. According to you what should be the proper strategy to deal with this? It is true that the indigenous production is unable to catch up with the increasing coal demand and the gap is set to widen with the passage of years. The simple and proper strategy is to ramp up the coal production. Apart from our strategy of increasing coal production, which I have already stated in an earlier question, at some point in the future coal import appears imperative. The present estimates indicate that by the end of the current Five Year Plan 2016-17, the coal demand in the country would be to the tune of 980 million tonnes of which, optimistically, the production would hover around 795 million tonnes thus leaving a gap of 185 million tonnes that may have to be imported, which is about 120 MTs of imported quality. What is the investment plan of CIL for the next five years? Capital outlay for the entire XII Plan Period (2012-13 to 2016-17) is pegged at Rs 25,400 crores. There is also an ad-hoc provision for acquisition of assets abroad at Rs 5,000 crores and Rs 25,000 crores for the current fiscal (2012-13) and XII Plan respectively. We also hope to invest Rs 7,500 crores during the plan period on rail infrastructure and additionally Rs 7,500 crores on new projects.
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