Coal India Chairman Pramod Agrawal said on Thursday that the company should continue to remain as a “government entity” in the future to maintain “price stability” of the dry fuel in the country and suggested an alternative methodology for coal pricing in future.
In an interview with PTI a day before his term ends as the head of Coal India on June 30, Agrawal said unlocking value cannot be the “sole” purpose of all enterprises.
As a government-owned entity, Coal India holds the responsibility of ensuring that the benefits of coal production are distributed to the public, he said.
Agrawal also pointed out that the miner’s identity is synonymous with the country’s energy sector, and the present structure with CIL as the apex holding company is “strong and stable”.
“We have seen severe price escalation in international coal prices last year. In such a scenario, private companies would have stepped up their prices as well. However, for a government agency like Coal India, such a situation is unlikely,” Agrawal said while responding to a question on whether the miner should continue to be a government entity to unlock its value.
The union government was reducing its stake in Coal India to raise funds, albeit in small doses.
This month, the government sold a three per cent stake to raise Rs 4,185 crore and reduced its holding to about 63.1 per cent.
Coal prices of the Kolkata-based PSU are heavily discounted as compared to imported fuel.
The average landed price per tonne of imported coal between April-September period of the 2022-23 financial year was Rs 19,324.79, while the average notified price per tonne (ex-colliery) of domestic coal was Rs 2,662.97 in the same period.
After more than five years, the miner recently raised prices of higher grades of coal (G2 to G11) by only eight per cent, which will boost its revenue by three per cent and will have hardly any adverse impact on power producers.
“In the future, we may consider revisiting coal prices (based on certain parameters) in shorter durations. This could be linked to inflationary costs, such as the wholesale price index or any other, which deems fit. This would be less disruptive than waiting a longer period of time to revise prices. Our priority is to ensure that the country is not burdened with (enhanced price) and that the company’s bottomline remains strong.”
Under the leadership of Agrawal over three years from FY’20, production and off-take for Coal India surged by an additional 101 million tonne and 113 million tonne respectively, while supplies to the power sector were higher by 121 million tonne during the same period.
“In FY’2023, all three parameters reached their highest levels ever along with profits and net sales. I tried my best,” the chairman said.
“I prioritised coal quality improvement, digitalisation, and fast-tracking ERP process. There has been significant improvement in grade conformity but it should have been even better,” Agrawal said stating his unfulfilled priorities.
“For any head, sustaining growth in production, meeting overall coal demand, maintaining quality and a healthy bottomline remain challenges. Finding alternative uses of coal in the future and exploring diversification avenues to retain CIL’s energy leadership are imminent tasks,” Agrawal said.
But he reposed faith in incoming chairman P M Prasad in “tackling the challenges”.
Speaking about the energy scenario in the country, Agrawal said for the next two decades at least coal will have its dominance in the country’s energy mix.
The use of coal in the country is set to peak by the early to mid-2030s, amid the highest addition in renewable energy capacity among many global economies.
Asked about his most challenging times, Agrawal smiled and said in a corporate journey there is no escape from challenges.
“The COVID-19 pandemic, shortage of explosives due to the Beirut explosion, and unpredictable coal demand were a few key challenges. However, we successfully navigated these challenges including coal imports for the first time, he said.
Before signing off, the bureaucrat said he believed that commercial mining does not pose a threat to Coal India.
The miner contributes to around 80 per cent of the country’s coal production.
“CIL is geared up to meet the competition with confidence with improving efficiency,” he added.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
