Coal India targets 280 mt extra evacuation capacity in 2017-18

Completion of three railway lines will come in handy for the state-owned company to reach its target of one billion tonne of coal output by 2020

As Coal India battles to meet the ambitious target of one-billion tonne of coal output by 2020, completion of three railway lines will come in handy, as it aims to boost evacuation capacity by 280 million tonnes. A total stretch of 448.28 km of railway tracks is under construction in Chhattisgarh, Jharkhand and Odisha, which will help the company evacuate an additional 280 million tonne (mt) of coal by 2017-18.

This will be a part of the East and East-West Freight Corridor.

EXTRA CAPACITY

• A total stretch of 448.28 km of railway tracks is under construction in Chhattisgarh, Jharkhand and Odisha
• The track will help the company evacuate an additional 280 million tonne (mt) of coal by ‘17-18
• The first line in the East Corridor, covering a distance of 180 km, links Kharsia, Gharghoda and Dharamjaigarh up to the Korba minefields in the state with a spur from Gharghoda to Donga Mahua thereby linking the prized Gare-Pelma mines

The project, jointly executed by the coal and railways ministries and the respective state governments under the special purpose vehicle (SPV) model will see an investment of Rs 8,615 crore, where the fossil fuel miner's share will be to the tune of Rs 4,000 crore.

The first 53-km long railway track, being built at an investment of Rs 1,044 cror, connects areas of Jharsuguda, Barpali and Saradega in Odisha. It also connects Angul and Kalinga.

“Slated to be completed by 2016-17, it will relieve the Talcher block under Mahanadi Coalfields (a Coal India subsidiary) to evacuate an additional 70 mt of coal,” an official in Coal India told Business Standard .

The second project, involving an investment of Rs 3,571 crore and stretching across 93.28 km in Jharkhand, will connect the Tori-Shivpur areas under Central Coalfields in the state through a single line and then extend further till Kathotia on a double-track to evacuate nearly 72 mt of the black fuel.

“There will be subsequent doubling on the Tori-Shivpur stretch after it is completed,” the official said.

The third project will encompass two distinct lines in Chhattisgarh featuring as part of the Eastern and the East-West Freight Corridor.

“This project, under South-Eastern Coalfields (a Coal India subsidiary), connects numerous key mines and hence is crucial,” the official added.

The undertaking spans across 302 km with a consolidated projected investment of Rs 4,000 crore.

The first line in the East Corridor, covering a distance of 180 km, links Kharsia, Gharghoda and Dharamjaigarh up to the Korba minefields in the state with a spur from Gharghoda to Donga Mahua thereby linking the prized Gare-Pelma mines.

The second project - part of the East-West Corridor - will cover a distance of 122 km from Gevra Road to Pendra Road.

An evacuation of an additional 140 mt of coal is expected from these corridor projects.

While the production spur as a result of increased evacuation is definitive, officials in the state-run company are reluctant to quote its monetary impact.

“It depends on the quality of coal as well as the global trends,” said another senior Coal India official.

Consulting firm Frost and Sullivan has, however, opined that once these railway lines are operational, an increased offtake will substantially benefit the world's largest coal miner.

“An additional Rs 400 billion in revenues and profitability to the tune of  Rs 100 billion, calculated at current blended price and assuming the global coal pricing scenario remains the same is projected for 2017-18,” said Amol Kotwal, director of the energy and environment practice at Frost and Sullivan.

The company has also undertaken several other measures, including technology enhancement and global technological collaborations, to boost production. It is also engrossing on uplifting the produce' quality by investing and expanding its washeries base.

Even as the coal behemoth – upon active directive from the coal ministry – is pursuing a mine-wise strategy and focussing on evacuation of coal, Kotwal feels the company will be able to complete 70-80 per cent of the one billion mt target by 2020.