Thank you all for coming to Coal India's Analysts Meet, 2025. We have with us Mr. Mukesh Agrawal, Director of Finance. Mukesh Ji, Director, Marketing, and Mr. B.P. Dubey, Company Secretary. Thank you, everyone. Without further ado, I'll just hand over to the management. Thank you.
Good afternoon, everybody. As already, the management team has been introduced by Anand Rathi and Company. Chairman CIL could not attend the meeting due to work exigencies. I just want to inform that the presentation for today's meet has already been uploaded on the company's website and also informed NSE and BSE. The board meeting held on 7th of May. The PPT related to results are also uploaded. The reference may kindly be referred to them. The session is around one hour time. We'll be ending around 4:30 P.M. I think that's fair enough, everybody. I request participants can introduce themselves before they start their questions. The sessions will be recorded and uploaded to the website due to regulatory reasons, and the reference can be referred to it. May I request the participants to kindly start one by one? Thank you. Let's start.
Thank you. We first take a case of volume. The accounting side needs to know about the shortfall volume. Can you mention from that time what the role of the accounting person was?
Actually, we had an issue with the service of the company. It's mainly the accounting team that had the shortfall. It's SECL that had the issue with the shortfall. And SECL will make sure that the accounting will be seen in the shortfall. Certain issues related to land acquisition there. And SECL also issues related to clearances EC and FC clearances from the ministry for certain patches. So that was the main issue where the production was slightly less than what we had projected. As far as demand is concerned, from these two subsidiaries, we don't have any shortages of demand. Rather, the consumers, they want more coal from these subsidiaries as of now.
Okay. And how are you managing the shortfall?
This year, if we are able to meet the guidance what we are given, then probably it should clear the backlog. We are closely monitoring the production from these two subsidiaries. By H1, we should get a clear direction as to what quantities and how much percentages they are going to achieve.
875.
27.
Okay. So we'll try to do it.
We would like to thank you for participating in the First Mile project. How many patches of coal are you planning to use for the total from the Mile project?
Last year, we actually had a growth of around 32% in terms of rake loading through the FMCs. And this year, in the first 45 days, we already have a growth of more than 15% there. And the new silos which are coming up in the subsidiaries of Mahanadi Coalfields Limited and CCL and NCL will further increase that. So, we are expecting a growth of around 20% or so in this FY as compared to last year.
Last year, FS, FMCs increased to 200?
FMCs, our rail loadings, they have increased from 292 to 311 rakes or so. In terms of the rakes, we have increased from 52 rakes to around 76 rakes in the last FY. Exact figures of silos, okay. Okay. Last year, we had a loading of 72.7 rakes per day. This year, so far in 45 days, we already have a loading of 87.1 rakes per day, which we are planning to take up to at least 100 rakes per day.
To 100?
From 87.1 actually to 100 will be at 100 rakes per day. 87.1 to 100 rakes.
Okay. Now that the coal price rate is going to increase at 2.9% last year, we also need to have a capital investment. That's not only the management team that is involved in the project. How do you see the collaboration of the management team and the CIL? Or do you expect that it will be less than about 100?
Actually, the total market share from CIL this year, we knew the coal production from the captive and commercial is going to be somewhere around 185. They landed at 198 million tons. And going ahead with the projections, what they have already given, 320 million tons, we are expecting to come from the captive and commercial. So the entire coal is going to come and eat into Coal India's share because that is how the mines have been auctioned, and that is how they have taken. From our side, the new capacities which are getting added by the power sector, number one, the capacities which were stressed and stranded assets and which are now getting regulated through either NCLT or through other means, they are coming now into regular production. This demand is coming there to us.
The capacities which were earlier importing some amount of coal, which was varying from 1%-10% for blending at different places, that has now reduced to zero. So all this addition is going to be added there with us. And when we check with our availability, then we find that we need somewhere around another 30 million-40 million tons more of the long-term commitments from non-power sector as compared to what we are having. In the last two years, we have already increased it by around 28%. From 90 million tons, we already reached 215 million tons for the long-term linkages with the non-power sector. And 320 million tons coming and eating into our shares.
The existing commitments, what the generators have already made with us for coal supplies in 2029-2030, that leaves us with another sourcing for around 35 million tons more of long-term commitments from the market. And that includes around 10% of our total production will probably be taken by spot markets or e-auction markets, including the trade exchange that the ministry is actually working out and the market spot auctions what we actually carry out. So we have factored this into account.
Okay. I take this much for all. The captive and the coalfield, so the marketing and the acquisition, how do you see the e-auction and the local competition and the captive and the coalfield. So how do you see the impact?
The premium in Q4 actually, there's a seasonal discount which varies. For Q4, my premium was around 43%. And Q3, it was 55%. Q2 was 50%. Q1 was 46%.
Spot is the premium?
This is. I'm telling about spot only.
Q4 is 43.
43. Q.
The premium versus the total average?
No, this is the premium over the non-power sector notified prices what we have declared.
Current e-Auction premium, you can tell us, compared to the Q4 premium of the previous year?
Currently, we are right now at around 40%-43%. And we, if we take out those two years where there was an abnormal increase, 252%, 300% premiums were obtained in the market due to whatever coal availability scenarios. Other than these two years, if we see the historical premiums of Coal India Limited, then normally they have hovered around 35%-40% when the spot markets were there. So we think that probably it is going to be within that zone only. If it comes down, maybe it may come down to 30% or so also because this demand is taken for meeting the seasonal or cyclical requirements. And it's not a base load normally type of a demand which used to be earlier. When the base load people, they came to the e-auction market, then we had that premiums of 250%-300%.
But otherwise, if we see in the business as usual scenarios, normally the markets were fetching us a premium of somewhere around 40%. So 30%-40% is still what we are anticipating it should give us. With power plant stock of more than 54 million tons, if we are getting 40%, then we are hopeful that we should be able to get this premium.
Okay. So now you have so many different places. So I specifically saw that first coal, CCL, and SECL, all the coal supplies were getting back from the power companies. So how do you say the impact of all this?
The issue was basically at these two places. We have still got consumers where there is a huge unmet demand in CCL and SECL. And this is despite the fact that around 54 million tons of stock we were able to build. But we, if we see it from the point of view of non-power sector consumers, then we find we still are having backlog areas which railway is still to supply for around two years or so. And there is a huge demand from the sponge iron sector which is actually heavily located in and around Chhattisgarh, SECL. So there also, we were not able to meet fully the demand in the auctions for linkages. And so we have to actually postpone some part of the demand to the next tranche which we are going to conduct in October.
Demand is available there. In CCL also, this year, based on the clarifications given by the Honorable Supreme Court, they are in a position to impose their own royalties or taxes on royalty. They have increased the royalty by INR 150. Still, the offtakes from CCL, they are growing. The stocks what we had at CCL and SECL are less than the stocks what we had a year ago at the same place. If the production picks up from these two places, despite the royalty increasing the price of CCL coal, still the unmet demand for consumers from that catchment area is there.
Will it uptake?
Huh?
Request the participant to please use the mic for asking questions.
Will that uptake?
Can you see that in the month of May in terms of uptake in terms of volume?
In terms of volume, if you see, if you see the same month-on-month comparisons than April and May, we are in positive around 2%-3% growth is there in CCL. So CCL, we are already growing. SECL, there is a reduction as compared to last year. So there, there are issues related to evacuation infrastructure and as well as coal being made available from different places. So there we have to sort out some issues which are internal to us. But in CCL, yes, there is a growth. The growth may not be of 10% or so, but the demand is still there.
Thank you.
Continuing with her questions, 15% volume growth. I mean, last three years we struggled to achieve double digit. CCL will be doing better, accepted. But 15%, don't you think it's too optimistic, especially when we are in a subdued demand environment? Captive mines are ramping up, even in the auction, NCL and other players are ramping up their capacity very nicely. So don't you think we are a bit optimistic in terms of volume patterns and most likely will be struggling to meet it?
If you see the forecast, then for the last two to three years, we have been projecting that production and offtake figures were the same. This year, if you see the projections, then we are saying that the offtake will be 25 million tons more than the production which is there. Now, when we go on this demand subsidiary-wise and try to see what is happening at different fronts, Northern Coalfields and WCL, the figures are almost in the same range as what was there for the last two to three years, and the localized demand is also available there. Mahanadi Coalfields, yes, we are banking for supplies towards the southern parts of the country or the incremental demand which is going to come, and SECL, there is a huge demand which is still unmet in the catchment area of SECL.
What I was saying is the sponge iron sector is asking, in the newspaper reports were also there. They are asking for more linkages from that place. We are not able to do that. And in terms of the e-auctions also, what we have tried to do is to increase the e-auction volumes because if you see the volume, the percentage bookings have come down. As compared to 2021, 2022 where there the booking was almost 100%, last year the booking levels has come down to 63%. So, so we are increasing the quantities in the markets. The quantum of bookings happening is reducing as compared to 2021, 2022, meaning thereby that consumers are becoming choosy and they are picking up their time and their places from where they want coal. So Q1 in case of power was slightly subdued.
But this increase in supplies from the captive and commercial, this was anticipated by us. And this we are that's why we are giving a projection for year- on- year key how much is going to come from captives and commercials. And the same rate of subdued demand from power sector, if it is going to remain in Q2, Q3, Q4, then it is going to be a different scenario altogether. But otherwise also, a ballpark figures of around 2.5%-3% growth in power sector. And the new capacity additions of coal-based plants which is happening, 14,000 megawatt if it got added during last year. And this year also, if the pipeline capacity is what we have planned, Ministry of Power has planned, and if they come, the old plants are not getting retired.
So, if we get that 2.5%-3% growth, which is not a very highly ambitious or a very optimistic figure, then also this demand should actually be consumed by the supplies from Coal India. Today's newspapers, they have reported that from April to February of the last financial year, the imports have reduced by around 10%. Normal growth in coal consumption is happening. The growth is not happening in imported coal-based. Rather, it is actually now contracting.
So in the imported coal-based also, the imports what we are doing, if we keep aside the steel coking and the coal consumption by the imported coal-based power plants and the coal consumption by some consumers who want only high grade of coal, they are sensitive to the quality of coal, then also somewhere around 60 million-100 million tons of coal on a rough estimate should be available where based on increased supplies only and the landed cost of coal if it is going to reduce, that should actually be available to us. So we are actually looking towards that side also key if our increased supplies we can reduce that. And this is also evident in the non-power linkages what we are offering them. So previously, two years back, our linkages were how much? 90 million tons. And the tenure was for five years.
Now, in less than two years, our linkages have grown by around 29%. More than 150 million tons we have already got. Gasification and steel coking are still to happen for this eighth tranche. And the supplies to non-power are also increasing because previously for the last three, four years, the supplies from Coal India were heavily biased towards power sector. 80%-82% of the supplies were being sent to power sector while non-power was only hardly getting around 18%-20%. So this, as per our initial estimates, we should be actually looking towards 75% to power and 25% to non-power. So if these things, they happen, then and if with the captive coal coming at the rate at which it is coming, then also we'll be able to, keep on meeting the demand.
And for CIL, if you see the projections, then from 1.1 BT - 1.1 BT, there is slightly a plateauing which is happening in 2028-2029, in 2029-2030, 1.043. And then five years down the line also, it is 1.227 depending on that call we will take when we reach 2029-2030, whether the growth is required or whether the demand is actually saturated in the market. So as of now, by 2029-2030, we see that the demand of coal should be on a sustained basis.
Thank you. The Jharsuguda-Sardega line, is it operational now, the double line?
Next year, by May, it is supposed to come in Jharsuguda and Sardega. The silos which were there, those silos have started coming up. Jharsuguda-Barpali, this is the 65 capacity. So by next year, it is supposed to come up.
Sir, next year means 2026. But I remember it was supposed to come in September 2023. That was our focus three years back, right, sir? Why the delays happening there?
Okay. Delays, they are happening in the railway lines because of many factors including land acquisitions and the involvement of other players which are there and along with railways also. So we had these issues with the Tori-Shivpur line also, which is now almost fully operational. And with the Tori-Shivpur line also. So Tori-Shivpur line is also now fully operational. And now we are depending on the capacities of the captive blocks to be ramped up so that the traffic can come there. And similarly, this thing, CEWRL also, East West Line also is likely to come up by this year end, if not by next year because of certain new guidelines regarding the directions from the EC for elephant corridors to be introduced at certain places because of which the estimates are to be revised. And we have to undertake a revised DPR for that.
There are issues which are coming in the projects which are of high value. In case of railways where land acquisition is concerned, we are hopeful that this time around we'll be able to overcome the.
Slightly tricky.
Slightly tricky. But I think this time around, whatever delays, they have already been factored at the amount of expenditure which has happened and the level at which it is there, it should now we should be in a position to reach those places.
So what is the current stripping ratio?
2.67.
Okay. So the stripping ratio is consistently increasing in my view, right, sir? Understood. Sir, another thing for BCCL, what would be our coking coal capacity there and the volumes?
Coking coal capacity is BCCL, the entire coking, the production is coking coal only. So we are planning for three coking coal washeries there. So as of now, we have supplied them somewhere around 3.7 million tons of coal to the steam sector. Out of which 2.4 or 2.7 was actually washed. So BCCL, the entire production is basically coking coal. We are not able to use it fully because of the lack of washing capacities. So we are taking two prongs approaches to meet the requirements of steel sector because this coal is going to be used coking coal only for the purpose of blending. It cannot entirely substitute the imported coal because of the ash content what it's there. So for that, one is the washery monetization. So 2 million ton Dugda washery we already auctioned.
JSW Steel has become the successful bidder wherein they are going to monetize the washery and take around 2 million tons of coal from BCCL. Similarly, in the steel coking coal linkage auctions, we have carried out a number of reforms because 20% of the coal only what we supplied raw to them can be used directly for steel production. The rest 80% either it goes at middlings or as rejects, which previously they were not in a position to actually resell. So we have allowed them in the last tranche the option to come and participate in the linkages through by forming consortiums. So the lead partner will use the steel after washing. The middlings which are getting generated, they can be used by the consortium partner in any CPP or cement or a sponge iron, whatever sector.
So that the participation here increases. And because of that only, first time the participation of the steel sector was there, we got some premiums also. And steel coking coal was booked. This year, the eighth tranche which is going to open up from 20th May, there is a demand from the steel sector key, okay, the reforms or the enabler what we have introduced are good. They wanted one more issue that the flexibility to change the consortium partner. The one who is using middlings, they don't want to lock in with one partner for a period of 15 years because over a period of 15 years, many changes they happen. So this time around, we have allowed them to change the consortium partners at least twice during the linkage duration, subject to a condition of minimum three years he has to be there.
So that they get an assurance that even if the current consortium partner does not want to continue for 15 years, they can have some more options. So this is also likely to increase their interest in this one. And once our washeries come, which are already in pipeline and will start coming up from next year, then the supplies to steel coking will increase. And we are thinking that we should be in a position to actually supplement the steel coking demand which is posed by the steel sector.
Sir, for the mechanized evacuation, what is our current rate that we are doing?
Just now, the figures what I told key we had a 32% jump from as compared to the last year. And this year again, we are having a jump of more than 15%. So, if I give you the figures per se, last year we loaded somewhere around 311.2 rakes or so. So out of that, around 72.7. If I take the full year average, 72.7 rakes were loaded per day from the silos. This year, on the first 45 days, we have loaded 87.1 rakes, as compared to the 72.7.
What is the total volume?
One rake is somewhere around 3,800 tons per day. So whatever dispatches we do there from there, so it will come. And we think that we will be able to take it to around at least 100 rakes, by Q2 when 100 rakes will come by Q2 itself when the new silos will come. But by 2029, 2030, if you see in terms of the capacities, then around 900 million tons of our capacity will be enabled to be moved through the first mile connectivity projects.
Sir, for the improvements, is it 150 million tons that is happening now?
150 million ton was already when we took up the initiatives for the first mile connectivity, it was already there. The 150 million ton why we are actually getting is the installed capacity which is there with me. So if there is a demand and if railway is able to provide me rakes at only those silos, then 150 million ton per annum I can load. But actually what happens with railways is I have got a set of sidings. One is a silo and one is a conventional wagon tippler siding is there. So in a bunch when railway rakes, they arrive due to whatever reasons, then they are not in a position to wait at a certain place. Whatever place they get, they place the rakes and we are asked to load.
Because of that, at times, even if you don't want to load the rakes through the conventional listing, but because all the rakes have come at the same time, then whatever capacity is available with me in terms of infrastructure, we start loading from there. But if railway is able to arrange rakes in a very systematic manner, queue one after another, it keeps on continuously filling for 24 hours of the day, then 150 million tons is our capacity there. And some of the times, even we falter because the mine which is linked with that particular FMC, if due to whatever reasons, local reasons, strikes, et cetera, or less production, if it doesn't feed at that rate, then from our side also, we are at times not in a position to load the complete capacity of the FMC what is available.
So on both these accounts, this installed capacity fully we are not able to use all the times.
The problem that you mentioned is mainly in SECL. Can I, can you assume that? Because the rake problem is out there.
In SECL, we, if we go for FMCs, then Northern Coalfields, we have got the capacity which is more or less fully utilized.
Right.
In CCL, we have got a capacity of loading four rakes per day. We are loading around three rakes per day, only one FMC at Urimari, which is presently operational. Then we go to ECL, we have got only one silo, in terms of rakes. Whatever we send through MGR is a different capacity. But whatever we send through the rakes, we have got a capacity of around 12 rakes. We loaded around nine, nine to 10 rakes because of less loading during the period of Q2, during rainy season. Yes, and then the main issue comes in SECL and Mahanadi where we are having silos, but the spread of railways, it requires that coal should be made available at all the sidings.
At some places, even with our silos, because of the issues of less production or less availability during the rainy season, the full capacity of the silos or the FMCs was not used on both these accounts.
Sir, last question from my side, if I may?
Yes.
On the bridge linkage, currently, what would be the volume that is going for this bridge linkage?
Bridge Linkage, I don't have the figures immediately with me, but I'll check and I'll get back to you.
Is it, I mean, what would be the premium in bridge linkage? Can we assume 60%-70%?
No, no. Bridge linkage is fixed. Bridge linkages previously, it was on a best effort basis. But then we started charging 40% above the power sector notified prices to the consumers. And that is shortfall, right from the first ton up to the last ton. We charge 40% except for the first three years of the bridge linkage. That means right from the day the mine was allotted. So if the mine is allotted and, it's supposed to be operational in three years, if it becomes operational, then it was at the power sector notified prices. But all the bridge linkages have so far been extended because none of the mines have come in the first three years of their allotment. So all the bridge linkages, they are going at around, not around, exactly at 40% more than the notified prices of power.
And the figures, maybe I'll just check, and before we close this meeting, I'll let you know.
The charges, like INR 150 rupees loading unloading fees and all are.
All other than that, all charges are applicable as are applicable for power and non-power. Same.
Perfect, sir. Thank you, sir.
Yeah.
Hi, sir. This is Yash from ICICI Prudential Mutual Fund. I had a few questions. So one, you said that the cap, the supplies from the captive and commercial mines will go to around 320 million ton. Am I right? This figure is for the coming year or in the years to come?
2029, 2030.
Until 2029, 2030. So, but as I understand, whatever mines have been auctioned, their actually peak rated capacity is around 500 million tons. So you don't see them.
By 2029, 2030, this 500 million tons coming, we are not projecting. We are going by what Ministry of Coal has projected based on the mining plans what they have approved. So that was around 320.
Till FY 2030?
Done. FY 2030. The initial first production increase comes up very fast when the mines are starting, and after that, it depends on the new mines which are going to come up, so starting new mines in these are the low hanging fruits which we are right now getting, and just now what I told you for bridge linkages, all the bridge linkages are more than three years. Means none of the mines have become operational in the first three years, so these are the mines which are allotted in 2016, 2017, 2018, and now they are coming up, so these mines will and further mines which are there, they'll keep on coming up by 2029, 2030.
If the figures they change, then two years down the line, again we'll have a relook at our figures and the market figures and our plans where they are going.
Okay. So maybe the 50 million ton incremental addition that was happened last year, this year maybe it would be just 10 million-20 million ton as per your projections.
Around 20 million tons.
Around 20.
Yeah.
Okay. All right. So next thing is, there is this new SHAKTI scheme that the government has launched. Can you just explain us, is there any benefit that Coal India specifically would derive out of this? And who are the specific customers that this scheme target is targeting? Because I understand before also you had the SHAKTI scheme, you could take linkages. So what is different now?
Actually, if you see the power sector then from 2007, 2011, 2012, then 2017, and then again 2019, the policies which are in place for supplying coal to the power sector in a transparent and objective manner, they keep on getting updated based on the market dynamics. So 2017, we had the SHAKTI policy where everybody was getting coal on an auction mechanism instead of a nomination-based mechanism. Nomination-based was only available for the state and central Gencos where the profits or whatever was going ultimately to the PSUs. In this case, what they have now said is that the central Gencos will keep on, this is what I read in the newspapers, the formal orders, I think they are on their way to the, we are going to receive them. The central Gencos will get linkages on nomination basis. The states will be getting linkages on nomination.
They can use it for two purposes. They can give those linkages to their own generating stations and get on nomination basis again or they can use this quantity and ask for tariff-based bidding from private players. Means we offer them linkages at notified prices for power, no premium there. and they embed this linkage in the bidding document for the tariff-based PPAs and ask for bids. Whosoever is the lowest bidder, they give this linkage to that bidder. so there they can use. and then in order to meet the short-term power requirements also, and for those players where the states may not like to embed the linkages from CIL at notified prices in the bidding document, they may just ask for PPAs and coal may be sourced from anywhere. For them, we are having two windows.
One will be a short-term window, one will be a long-term window. Short-term windows, maybe they can source power for a period of around seven years. Long-term window, they can source power for around 25 years, and the existing players who are also there, they can also switch over to this window, but prohibited. They should first lift 100% of their assured quantities from the existing linkages and then balance for whatever reasons, some great slippages or quantities less or more generation requirement or whatever is there, they can shift to that. So, that flexibility has been given to them. So they don't have to depend entirely on the existing linkages. If they want, then they can play it on both sides. Means they can take it from my existing FSAs or they can go and participate in the auction windows and take coal from there also.
All right. Sir, and, lastly, sir, on the content, is there any contingent liability relating to the tax on minerals case on the last Supreme Court hearing?
Actually, that case is under review. And as of date, there is no final outcome. So we had not taken any liability.
Last time we had estimated around some INR 35,000 crores of, so.
That is estimated as there. But actually, the order should come, then any liability should arise. As at present, there is the different SLP petition there. Once the review petition is heard, after that a specific order will come. After the order will come, then we will see what to do the liability on this sector.
All right. Sir, and lastly, on the e-auction part of the business, what's our thought process behind that? Do we have a specific percentage that we like to keep for e-auction? Or do we say that we can do as much as we can, we'll just go and just flood the market with the e-auction volumes if our FSA is obviously fulfilled?
Actually, the e-auctions, we were given first amendment. Coal India was given amendment in 2007 that in order to develop the spot markets, at least 10% of your production will be offered in the e-auction markets to develop the spot markets and meet the seasonal and cyclical demand of the consumers. So that was one guideline. Then 2016, 2016, yeah, 2016, we gave them another guideline that you can offer up to 20% that is subject to the condition that the FSA requirements are met. The thought process behind this probably from the government was that we should not be trying to actually maximize the revenues by going through at the cost of the long-term linkage consumers. So that was there. So now what we have done is key since some subsidiaries, they are having high stocks, some subsidiaries like Northern, there is a huge demand from the existing consumers.
CIL as a whole is supposed to meet this range of between minimum 10% up to 20%. We have asked Northern to slightly reduce the quantities and keep on offering more for the FSA consumers which are there. The other subsidiaries, we have asked them to offer up to 40% of their monthly production if they so want in order to liquidate a stock from a certain mine or a certain place. By Q3, we'll again take a stock because we know it's not probably going to buy whatever chance is not going to increase beyond 20% also. To give them some local flexibilities in some pockets, we have given that. Based on that, the subsidiaries now, some subsidiaries, they have increased their offers of beyond 20% of their monthly production also. Some are still at 10%-12%.
Some subsidiaries, this is a dynamic pricing process. Some subsidiaries are reducing their reserve prices. Some subsidiaries are actually keeping it at the same levels depending on how the market is responding. So 10% - 20% is the range where we have to be there at the end of the year.
So, basically what you mean to say is if there is demand in the e-auction and if you have committed your FSA supplies, you'll be supplying whatever you can up to 40% wherever.
Yeah.
Currently, if that is not happening, it means that there could be a lower demand, is what I'm implying.
A number of situations that some places where the issue of railway rakes is there. So there, in that case, we may not be in a position or we are not interested in further increasing the railway load. There we try to increase offers through road mode. So road mode also, again, the road mode normally attends to the local demand which is there within normally around 50 km or so. So if that demand is saturated, the offtakes will be lesser. But, whatever trends we have seen, so far, the percentage premiums what we are getting is somewhere around 40% and the bookings are in the range of around 55%-60% of whatever we have offered to them. And these numbers will again change because historically we have seen during Q2, the bookings, the increase, the supplies from my side, they reduced.
So overall, if we see probably around 30%-40% somewhere.
30%-40% of total.
Of the premiums we should probably be getting. This is the long-term seven-year average if we see taking out the two years of abnormal very high premiums if you take.
Volumes around 10%-15% total.
10 is minimum we have to keep and around 20. The 20% beyond 20% will not allow as of now.
All right.
So, but even at 20% and 850 million tons of production, that makes around 170 million tons of coal being booked, which should not be an issue because last year we were in a position to book around 90 million tons only. So, we are not worried. We are going to increase 20%.
Okay. Sir, and just one last question, how do we see the employee cost going ahead from here on and how much of the employee count is reducing every year and projected to reduce every year?
Presently, we have around INR 2.20 lakhs employees. On average, 12,000 employees are superannuated every year. At these stages, we are expecting some 1,000-1 ,500 to go through the market and then the liquidation process to be done. Manpower cost will continue to reduce the next one year. After that, the window we have given to 26 and the liquidated will continue to decrease. Then the manpower cost will again increase.
On an absolute basis, you mean it's around 48,000? Thanks.
Yeah. Pathanjali from Sundaram Mutual Fund. Sir, I have a couple of questions. One is, what is our share of MDO target for the next few years and, what would be the differential in terms of cost structure if we use a MDO route to produce and sell versus doing it with our own, employees or as a different?
Actually, there is no such target. Okay, how much will be the MDO, how much will be the differential. We always encourage the departmental production. But when we are taking new mines, we evaluate which mode will be most economical. If the MDO mode is going economical, then we are going with that. But if there is a mine where already equipment are there, surplus equipment is there, manpower is available, then taking into consideration we are taking a call. So based on which project model is giving best IRR, we are going ahead with that.
Sir, and you've given guidance for FY 2026 that is around 875 million tons. But the power growth is only around 3%. So I don't get the bridge of how the coal consumption can be significantly higher when the demand is growing only by 3%.
The demand is growing by 3%, but what we are looking towards is the coal which was number one coming from the imports as well. That we just now discussed the figures of around somewhere between 60 million-100 million tons is still there for us to go. Secondly, even on this high base, a 2.5%-3% growth in the power generation, this translates to a growth which is in line with the and the new capacities which are getting into power sector for 14,000 MW which has come.
So these two things plus the growth projections which are given by Ministry of Power. So that growth projection has given us a 6% increase in coal demand from us. We are hardly taking 2.5%-3%.
Sir, in current year, were there like meaningful delays in terms of commissioning of plants? FY 2025, which means, power plants.
Power plants, yeah.
Can you quantify how much that would be? Like, as per your estimate at the start of the year, what would have been your expectation in terms of capacity available for supply and where was it at? What was the miss there?
Yeah, I didn't get the question clear.
So for FY25, thermal capacity for which you could supply coal, how much was your expectation initially and how much did it come out to be?
Yeah, we had a plan of supplying around 645 million tons of coal for power sector through all the bridge linkage and the regular ones. We ended up at somewhere around 614. In case of non-power, the balance growth, what we got around 10% growth from 133.8 - 147. The rest of the growth which came to us. Around five million tons of reduction in power and around, this 10% increase or 14 million tons of growth there. Five reduction and 10 here. So 14 million tons we grew in non-power. Total our growth was around 10 million tons as compared to last year.
So based on what you're saying, this year's shortfall was around 40 and around 80 million tons get added next year. So additionally, closer to 100 million, 110 million-120 million should come in power, demand alone for 2026. Is that correct?
120 means, 120.
120 million tons of additional demand for power sector for FY 2026. Would that be the correct understanding?
They have this year, they have asked us 686.
686.
Six from Coal India only.
Understood.
So it's the Western India and Captive and all those people, they'll also come into that. So they have given a projection of around 686 from us only.
Okay. And last question, sir. e-auction, like last five or six years or even 10 years, if we take the rate of growth is, like five-year volume would be around 4% growth and 10 years is around 5.5%. So can you tell us like why there was a phase between like 14 - 19 where the volume growth was very sharp and we hit like 100 million consistently? But today, like we have tapered down from there. So it kind of reduces our profit pool very significantly because we make probably two and a half or three times as much money doing that. So what is the missing link here? Because on one side, we are just meeting the 10% requirement, but it's a significantly higher profit pool for us.
Why would we miss out on some, like, based on what you're saying, we can go up to 20%. Why, where are we not able to meet this demand, or what is happening?
Whatever we have offered. So in 2022, 2023, whatever we offered, 98% was taken up by the market. Whatever we offered. Then in 2023, 2024, 82% was taken by whatever we have offered for the full year. And 2024, 2025, whatever we have offered, around 63% was taken up by the market. So this, appetite of the market, it actually changes. During the periods of 2021, 2022, when it was picking up very sharply, you would have seen a sharp drop there. That was, because of a PSU, the thrust to supply to the long-term commitments made to the power sector. So it had its toll there. We first met the long-term commitments and the e-auction volumes was very low. The premiums was very high. But that for a PSU, it happens when the shortages in the market, they occur.
We are supposed to be meeting the long-term requirements. And now when the long-term requirements are more or less met at most of the places, whatever they are projecting, then we are trying to see how best we can meet their unmet demand or the cyclical demand which they are not able to contract through a long-term demand. And at the same time, if you see my FSA commitments as compared to 2016, 2017, or say 2019, 2020, the place where we are comparing, my FSA commitments have increased like anything, including both for power and non-power. So if my FSA commitments increase, the consumer base within the country is the same. So either it has to come down from the imported coal or the incremental growth in the economy which is coming there.
So we are on right now in order to meet the market demand, in order to reduce the reliance on import. The importer person importing coal, he is going to reduce import only when I enter into long-term contracts with him. Short-term contracts where nobody gets the confidence of actually not getting towards imports. So this was one key reason if we have to on a long-term basis, if we have to get the consumers, then we have to offer them long-term contracts. Last two tranches of non-power, what we have done, we have increased the tenure from five years to 10 years. So that from my side, I was able to lock in a consumer for 10 years. From consumer side, I was giving him an assurance of sustained supplies from one source for a longer period of time.
So these two factors means myself ramping up my long-term commitments of power and non-power and consumers coming towards this side. This is the issue why we are not able to actually keep on increasing the e-auction volumes there. There was one question of bridge linkages. Just now somebody asked, 22 million tons is my existing commitments with the different consumers of power and non-power.
Given a guidance of CapEx of INR 80,000 crores previously, I mean two quarters ago, and today's presentation that was released yesterday, in coal to gas, coal gasification, it's coming around INR 37,000 crores-38,000 crores. And the thermal power generation phase one is about INR 15,000 crores, so where is the other balance going to be taken?
Land, plant and machinery for the mines. These are the diversification CapEx. But the regular CapEx for the mines will continue where the land, plant and machinery and other equipment will be required.
Which will obviously go into the growth of the production.
Yeah.
This could be like your maintenance CapEx.
And then also thermal projects is also there where we are working mainly in the coalfields.
Yes.
Is there, and we are trying for the one DVC joint venture. So all those CapEx will also come. So these are only the diversification and critical mineral we had not considered here. So those figures are formed. Around INR 20,000 crore CapEx will continue for the next 3-4 years.
When do we see the, you know, obviously because we are going for gasification, we see the positive effect on the net margins? When would we be able to see that in the coming years?
Actually for this, we had called the bids. We had done a Sonepur Bazari coal to syngas where we had formed a JV with the BHEL. BHEL coal to ammonium nitrate. For that, bids have been called up. Let the bids should be come, we will evaluate whether the project feasibility is coming after that. So it is still in the.
So the CapEx numbers there would still not have been done, right? It will happen eventually once the bids come.
It will come and the project will be done.
Okay. Thank you.
Hi, sir. This is Basant Joshi from 3P Investment Managers. Coming to CapEx, you mentioned that 20,000 crore CapEx will be spent every year going forward, so how much did we spend last year?
Last year it was INR 19,500 crore plus.
But sir, if we look at the cash flow, the cash CapEx was around only INR 11,000 crore.
14,000 crore there. Apart from there, also some other CapEx advance is there. UHV grade and other things will, if you go totally, it will come to INR 19,000 crore.
Sir, again, when would be the non-executive wage revision be due? Because last time it was around 22.
June 26.
June 26. So again, we would be looking at some sharp cost increase in the employee cost. So to tackle that, are we making any efforts to increase the FSA prices?
It will be taken up by the board at an appropriate time. Let the wage revision should be finalized based on that. Considering so many factors, the board will take the final call how much is required or not, when is to be revised.
Sir, last year in your balance sheet, you highlighted that you have around 15,000 crore of receivables from the tax authorities. I think we also realized some money in the last quarter.
Yes.
So can you guide like how much have we realized, how much is pending and timelines for realizing the balance?
Yes, sir, INR 3,000 crore has come that you have seen in the other income. Other is also in the process. It has not come so far. So this is always took some longer time. It has not been updated. It is not.
But those are settled cases, right?
This is a settled case only like accounting has been taken.
Okay.
Others are in the pipeline at a different level.
Sir, OBR balance we have around INR 58,000 crore in the balance sheet as a liability. Like for, in how many years do we plan to unwind that into P&L?
It is not a planning. It is the behavior of the mines. How the mines will behave. Last two years, some INR 7,000 crore-INR 8,000 crore have been unwound. And based on the mines movement and the mines nature, it will be. So even though we expect it will take three to four years or four to five years.
Okay. And sir, historically we have kept very high cash balance because we had this OBR liability, stripping activity liability in the balance sheet. Assuming this liability comes down substantially, would we still like to keep high cash balance or give out as a dividend?
There are two different things. OBR stripping is not a cash item. It is a non-cash item. So cash balance is indifferent of the stripping ratio. So whatever the cash balance is there, that will be utilized because again and again we have the cash balance. And in the next four to five years. And for that also, equity is required. So based on that, this cash balance, as and when the CapEx will progress, the cash balance will also be get deployed.
Okay. Thank you, sir.
Hi sir, just wondering what's your view on the pricing front, in terms of e-auction prices. Like, we generally see a general trend of coal prices are kind of weakening. So are you also similarly seeing a trend of the e-auction prices?
Normally, e-auction prices, if we see the historical trend of CIL, then number one is they have moved in tandem with the imported coal base prices. This is, this is one correlation which we do if we map the e-auction premiums and the imported coal base prices where it has gone. That is one. Historically, in terms of absolute numbers, it is around 30%-40% it was there. Now with the commercial and captive mines coming and the sufficient coal stock at the power plants end, we may get somewhere around 30%-35% or so. So that will depend. As of now, we are still waiting around 40% or so. So this will be dependent on how the market gets its supplies from the different players in the market.
So the near-term trend as per what we see is a bit challenging, right, in the pricing front?
Challenging means key, I don't know. When coal was available in plenty, then also we had 35%-40% premiums. When coal was in shortage 2017, 2018, then also we had a 38%-42% premium ranges overall. Some places high, some places low. So it's very difficult to forecast the prices what we are going to get in the next quarter. But probably the guidance is we are going to be somewhere between 30%-4 0%.
Okay. And in this 875 million tons, the guidance that you had given, how much is the e-auction volume?
e-Auction volumes, again, we said key 87.5. I have supposed to do it. That's the benchmark, and around 170, I have to do again because that is the upper limit, so it has to be somewhere in between them, depending upon how the market takes up. Last year we were able to do 89, so this year our idea will be because we have to liquidate 25 million tons of stock also with us, so our idea will be to offer coal if the market takes up to 20% of our production. If it doesn't take, then the final figures we will firm up maybe by the third quarter when we get a better clarity on how much has so far been booked by the market.
Okay, but you are pretty confident that there will be a reasonably good growth in that?
Yeah.
Like tens kind of? In, in what, double digit kind of growth?
Yeah. At least.
Okay. Thanks.
Thank you everyone for coming.