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Engineering | April 2014

CIL achieves production target, but long term growth muted

 By Rahul Kamat

State-run Coal India Ltd (CIL) and its subsidiaries have posted a 2.3 per cent growth in production mining activity during the year ended March 2014. CIL and its subsidiaries have achieved 96 per cent of the target (actual 482 mt; achieved 462 mt), envisaged by the Government of India. Ergo, in the month of March, CIL has surpassed its production target by 101 per cent from 52.71 million tonnes to 53.40 mt. Meanwhile, CIL has also seen a modest growth of 1.4 per cent (96 per cent achievement) in the offtake or dispatch of coal in the year 2013-14. It is expected that possible contribution from recently obtained environment clearance for brownfield expansion (Bina, Lakhanpur, etc) and ramp-up at existing mines could help increase production by 30 mt in FY15. Long-term growth challenges: While relaxation of CEPI and permission for brownfield expansion should facilitate volume growth, there is a time lag between approvals and action. Also, the 25 per cent/50 per cent brownfield expansion for existing mines, which allows doing away with public hearings, still necessitates approvals from MoEF and state governments. "Administrative delays may impact our volume growth in the long run," said an official from CIL. He added: "Another big challenge has been land acquisition, particularly for greenfield projects and in a few existing fields." According to the CIL official, acquiring land will become more challenging, given the guidelines to bring the Coal Bearing Area Acquisition Act (CBA) at par with the Land Acquisition Rehabilitation and Resettlement Act (LARR) by January 2015. Holding gramsabhas and obtaining the consent of at least 50 per cent of people affected could accentuate challenges, despite higher compensation packages. Similarly, the development/progress on three critical railway lines remains slow. The production ramp-up of 300 mt is contingent on the commissioning of evacuation infrastructure. While the Tori-Shivpur line has received all clearances, execution is slow and is unlikely to aid any production before the end of the 12th Plan. Also, the original alignment of Shivpur-Hazaribag was not agreed on by MoER and has thus been realigned to Shivpur-Kathautia.    

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