We will look at new coal blocks in Odisha and Chattisgarh: Ravi Uppal

Interview with MD & CEO, Jindal Steel & Power

Gearing up to participate in the re-auctioning of coal blocks, Jindal Steel & Power is confident of financial support. In a telephonic interview, Ravi Uppal, managing director and chief executive officer, talks to Aditi Divekar on the bid process and where the company stands. Edited excerpts:

Do you expect aggressive bidding once these coal blocks are opened for e-auction?

What I can say is that only the serious players will bid. It will not be the traders. Only those companies which genuinely need coal in large quantities, like the steel and power companies, and to whom bidding for a block makes economical sense will participate. Transportation cost is important when bidding and so, only those companies to whom it makes sense geographically will come ahead.

Will Jindal Steel bid for the same blocks or also for newer ones? If yes, what will you look for in the new mines?

Apart from our existing blocks, we will surely look at new ones, mainly in Odisha and Chhattisgarh, since we have our facilities in Angul (Odisha) and Raigarh (Chhattisgarh). Also, our demand for coal is expected to go up as our capacity is moving higher.

You have already invested in infrastructure at your mines, plus you have been slammed with a penalty by the Supreme Court. Now, you will have to bear the e-auctioning expense. How do you plan to manage funds for this?

Yes, we will have to spend again and bid for coal blocks but we have to live with that. On arranging funds for bidding, we are talking to the financial institutions who stand by Jindal Steel and are aware of our capabilities. As of now, I don't see any problem in arranging funds for participating in bidding.

If, in the aggressive bidding, you lose a block where you have already invested in infrastructure, what options are you looking at?

We have invested a lot of money in developing the infrastructure at the mines earlier allotted to us. We are hoping the government compensates suitably. We have not yet raised this issue with the government but as an option, we are also bidding for more mines which can be used as a standby.

The base price of coal mines is not known yet. What would be a comfortable base rate for a steel and a power company?

There will be a committee set up by the government to fix the base price and I'm sure they will act in a responsible way, since the cost has to be finally passed on to the consumer. It is difficult to give a comfortable base rate level, since a lot of factors such as coal grade, quantity to be mined and scale of the mine varies from mine to mine.

With coal supplies coming, where do you see your utilisation levels for the Angul steel plant and the Tamnar power plant in Chhattisgarh. Can you give a time line for the two plants?

We are managing good utilisation levels even with the existing provision of imported and e-auctioned coal. The Tamnar power plant (in Raigarh, Chhattisgarh) is at 95 per cent capacity utilisation. Its third unit has been commissioned and the fourth is expected to commission by December. To that extent, all the four units at Tamnar will be ready. At Angul, we plan to bid for the Utkal coal block and the thermal power plant here is currently at 55-60 per cent capacity utilisation, while the steel plant is at 60-70 per cent.