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Badal Sanyal

Kolkata, Nov. 12

WESTERN Coalfields Ltd (WCL) may find it difficult to maintain its present position unless effective measures are taken to compensate the gradual loss of production that the company is suffering because of old and uneconomic mines.

This suggests that WCL, one of the eight subsidiaries of Coal India Ltd (CIL), in the not-too-distant future, may face rough weather following its continued operations from uneconomic mines. A board level source of the Nagpur-based company told Business Line over the telephone that the company anticipated a loss production between 1.5 million tonnes (mt) and two mt per annum as the reserves in some of the mines would either be exhausted or the production had to be stopped due to prohibitive cost of operation.

In fact, WCL has ambitious plans to develop a total of 22 small mines during the Tenth Plan with the objective of creating an additional capacity of about six mt by the year 2006-07. The production target by the terminal year of the current plan is set at about 38 mt as against the production of 37.8 mt in 2002-03. The Tenth Plan's target has been calculated after talking into account the six mt fresh capacity to be created.

Interestingly, the company will virtually have no growth in production during the ongoing Tenth Plan, while the cost of operation is bound to increase considerable in the next three years. As the total production remains stagnant, the company may be forced to revise prices to neutralise the additional cost of operation, the source pointed out.

However, WCL produced 18.21 mt during the first half of the current fiscal against the target of 17.02 mt. Of the total production, opencast mines contributed 13.7 mt and underground mines contributed 4.51 mt.

It was indicated that the profit before tax of the company during the fiscal ending March 2004 might be less than the previous year's Rs 472 crore. The anticipated lower profit should be a pointer about the company's future state of affairs.

The management is actively considering introducing new production technology in the underground mines to minimise workers and also to improve productivity. Moreover, about 20 virgin coal blocks have been identified for the private sector to develop as captive mines.

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