Friday, May 30, 2014

Ministry for restructuring CIL; state miner’s Q4 net profit drops 18%

THE new BJP government led by Narendra Modi has accorded special importance for restructuring the coal sector and the coal ministry wants to focus on reviving the sector. In its presentation to the Prime Minister, the ministry has attached importance on three critical rail links...
for evacuation, seek quicker environmental clearances and speed development of captive coal blocks.
Giving ample reason to the ministry to opening up of the coal sector and restructuring state-owned miner Coal India Ltd (CIL), the demand-supply gap for coal is likely to reach 185 million tonnes (MT) by the end of the current Plan period in 2017.
Coal India Limited (CIL) on May 29 posted an 18-percent drop in consolidated net profit at Rs 4,434.19 crore for the fourth quarter ending March 31 compared to Rs.5,413.91 crore in the same quarter last year.
The world's largest coal miner ascribed the fall to a write-off caused by a dispute with state-run generator NTPC on the quality of coal supplied.
"On the basis of this settlement formula and pending final reconciliation/settlement of all the subsidiaries of CIL with NTPC Ltd, provision/write off of Rs.876.45 crore for such deemed lowering of grade as compared to the grade of coal supplied and billed has been considered in the accounts during the quarter," Coal India said in a filing to the BSE. Total income from operations at Rs.19,997.98 crore rose marginally over Rs.19,904.57 crore in the same quarter of the previous fiscal.
To resolve the dispute, the government has advised "extrapolation of the result of the third party sampling/analysis during October-December, 2013 to the supplies during the past period from October 2012 up to September 2013."
The coal ministry has informed the government of its major achievements over the past few years. These include simplification of royalty rates in May 2012 and the switchover to gross calorific value-based grading and pricing of coal apart from the initiation of auctioning for coal block allocation.
The ministry has listed many reasons for constrained domestic output: Pending environmental clearances, delays in land acquisition, slow resettlement and rehabilitation, pending court cases related to captive allocations and issues related to transfer of land and availability of explored blocks.
CIL has signed fuel supply agreements for projects of 78,000 Mw to be commissioned by March 2015. India produced 565-mt coal last financial year versus a target of 604 mt. The demand is likely to go up to 787 mt in the current financial year. The government expects 643 mt will be sold; 144 mt will have to be imported.

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