Coal news and updates

Coal India misses sales target by 7 per cent

Coal India has missed its sales target by 7% in the first half of this financial year while slipping 4% on its production target due to delays in renewal of existing mining contracts and finalisation of new loading agencies at some mines. Nonetheless, the state-run monopoly miner managed a growth of 5% in sales between April and September, compared to the year-ago period.

The company achieved sales of 230 million tonnes against a target of 246 million tonnes on a production of 210 million tonnes, compared to the target of 220 million tonnes.

"We lost some 10-12 million tonnes of sales due to delays in finalising new agencies for loading and transportation of coal by the Director General of Resettlement (DGR). Another 4-6 million tonnes of sales was lost as a result of delay in finalisation of mining contracts with third parties," a senior Coal India director told ET on condition of anonymity.

In the first nine days of this month, however, the miner has posted a 12% growth over the year-ago period. The official cautioned though that production might dip in the days ahead due to the effect of the cyclone Hud Hud, which is expected to hit the eastern coast on October 12.

DGR, a body under defence ministry had along with the coal ministry formulated Ex-Servicemen Coal Loading and Transportation Scheme, an arrangement with the dual purpose of having union free captive transport companies in Coal India's subsidiaries and providing resettlement opportunity to ex-servicemen.

The scheme is administered on the basis of memorandum of understanding signed between the Coal India and DGR which lays the terms and conditions governing the formation and running of the coal loading and transportation companies.

It is effective in Mahanadi Coalfields, Bharat Coking Coal, Central Coalfields, South Eastern Coalfields and Western Coalfields.
"A delay in replacing old agencies with new ones led to the loss of sales for Coal India," the official said.

Central Coalfields, Western Coalfields and South Eastern Coalfields have been the most affected due to the delay.

Coal India produces about 40% of coal through contract mining, with most contracts valid for three-four years

Source: The Economic Times