The end of monopoly as proposed by the government in an ‘Atmanirbhar Bharat’ would be the least of Coal India’s troubles these days.
Besieged by falling demand and impending liberalisation of coal mining sector, country’s near-monopoly state-owned entity is faced with a unique problem never imagined in recent memory.
Its cash in hand is being depleted fast due to an unfavourable cash flow situation due to mounting outstanding from customers, mainly the state-owned power generating companies.
The crisis has reached such a level that Coal India’s top brass is even thinking of short term borrowings to tide over the crisis temporarily.
Depleting cash balance and mounting dues
From ₹18,000 crore in FY13 to ₹253 crore in FY19, Coal India’s cash and cash equivalents have been coming down every year and the current year would be tougher with rising receivables.
During a comparable period between FY12 to now, Coal India’s dues from coal sales reportedly rose from ₹7,400 crore to ₹17,000 crore.
The dues were little above ₹12,000 crore in January but since have risen sharply following the lockdown, sources said.
Among the subsidiaries, Bharat Coking Coal Ltd, Central Coalfields Ltd and South Eastern Coalfields are particularly in trouble having reportedly been forced to prematurely withdraw fixed deposits.
Crisis at Bharat Coking Coal
The crisis is most severe in Bharat Coking Coal, a subsidiary of Coal India.
This story is from the June 2020 edition of Steel Insights.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the June 2020 edition of Steel Insights.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Steel's Net Zero mission
The country’s commitment to achieving Net Zero within a targeted timeframe will now propel its steel sector towards a sustainable future in line with global trends.
Fuel Price Hike, Supply Chain Disruption Hurt Festive Sales
Supply chain disruptions and fuel price hikes have hurt festive sales in a big way as most auto majors posted decline in sales in October.
Seaborne coking coal offers remain range-bound
Seaborne coking coal offers moved in a narrow range in October amid global supply tightness and healthy spot demand.
Global crude steel output down 8% in September
China manufactured 74 mt in September, fall of 21% y-o-y while India’s production went up by 7% to 10 mt.
MOIL embarks on expansion projects
“Even though our country is blessed with manganese ore reserves, we import 50% of the domestic requirement. We have to lower our import dependence and save precious foreign exchange.” Ram Chandra Prasad Singh, Steel Minister
Iron ore handled by major ports down 17% in H1
The 12 major Indian ports handled 27 mt of iron-ore during H1 of 2021, down by 17% from 33 mt recorded for the corresponding period of previous year.
Shrinking China output to boost India exports
“In the third quarter of 2021, the company actively responded to the pressure from external policies, such as production curtailment and dual control system on energy consumption and intensity, as well as coal resource shortage and surging prices.” Baoshan Iron and Steel Co Ltd
Indian Railways' iron-ore handling up 25% in H1
Indian Railways in April-September of 2021 (H1) transported 84 mt of iron ore, up by 25% over 67 mt during April-September 2020.
September crude steel production up 7.2% y-o-y
India’s crude steel production in September 2021 grew 7.2 percent to 9.547 million tons (mt) over September 2020 but was down by 3.2 percent from August 2021 output, provisional steel ministry data showed.
“Five enablers: way forward to sustainable cleaner steel”
Right and scalable technology, appropriate policy guidance by government, access to finance to fund transition, willingness of customers to pay for cleaner products and infrastructure for use of new technologies are the need of the hour for the sustainable and cleaner steel industry, according to Madhulika Sharma, Chief Corporate Sustainability, Tata Steel.
