At a time when the Singareni Collieries Company Limited (SCCL) is planning to go beyond coal, its chairman and managing director N Balaram tells TOI about the reforms being initiated
Q: SCCL is in massive expansion mode. What are the areas you are currently focussing on?
A: Apart from coal production, SCCL has been focussing on renewable energy such as geothermal, solar power, CO2 to methanol, battery storage power and pumped storage power for the past two years to reduce greenhouse emissions. We have inked a pact with the Rajasthan govt for 1,500 MW of solar. The other area is exploration of critical minerals or rare earth minerals across the globe. The company will float separate companies for both soon. Telangana govt has set a target of generating 20,000 MW green energy by 2029-30 and is formulating plans to become a model for the country.
Q: Why is SCCL showing interest in critical minerals?
A: That is the future. There has been a growing demand for battery-operated vehicles and solar energy. For this, minerals such as lithium, cobalt and nickel are crucial. These are being imported from other countries at present. The Centre has also stated its aim to make the country Net Zero by 2070 and released a list of 30 critical minerals that India seeks. Already, we have entered into agreement with IIT-Hyderabad on this on working out strategies. Last week, the govt had made an agreement with the Queensland (Australia) govt on 11 critical minerals exploration such as vanadium, cobalt, indium, chromium, titanium… SCCL is focussing on three ABC countries – Argentina, Bolivia and Chile – which are called the Golden Triangle (for access to critical minerals). A team will be visiting Argentina soon.
Q: Is the company financially strong enough for the new challenges?
A: SCCL was referred to the Board of Industrial Finance Restructuring (BIFR) not once, but twice. After I took over as director (finance) in 2019, the company focussed on becoming financially strong. Our credit rating was ‘double A minus’ at the time and now achieved ‘double A plus’. The cash credit was just Rs 131 crore in 2019, now it is Rs 4,650 crore, bank fixed deposits rose from Rs 1,500 crore to Rs 2,400 crore and even gratuity increased from Rs 900 crore to Rs 4,500 crore. Earlier, banks were reluctant to support the company. Now, they are queuing up to fund the company.
Q: Will you reduce coal production in the future?
A: For now, we will continue our coal production as usual. But we are planning to bring in some reforms to improve efficiency. Of my total production of 2.50 lakh tonnes per day, 90% of the production comes from open cast and only 10% comes from underground mines. We will soon close some underground mines and convert them into open cast to reduce cost. While Rs 9,000 per ton is the cost of production of underground mines, it is just Rs 2,500 per ton in open cast mines. Because of our high production cost, there is a demand to reduce the prices of coal. The reforms are compulsory to reduce the production cost. Currently, we have 40,000 employees and workers, which will be reduced to 30,000 in the next few years in a phased manner and improve their efficiency.
Q: There is a criticism that SCCL coal is costly compared to Coal India Limited and even imported coal.
A: Industries, especially cement, sponge iron, ceramic and pharma are our clients. They are asking for reduction of coal rates as our coal rates are high. We are planning to reduce rates to Rs 300 per ton for thermal power generation companies and by Rs 700 per ton for non-power industries. The agencies met me last week and urged me to reduce prices.
Q: What are your plans for increasing coal supply during the summer?
A: We have decided to increase coal production to various thermal power stations both in the state and neighbouring states in view of increased power demand. SCCL supplies coal to AP, Karnataka, Maharashtra, Tamil Nadu apart from various thermal power stations in Telangana. I have put 2.6 lakh metric tons a day and also to remove 17 lakh overburdens.