With substantial grown in coal production over last 5 years, Western Coalfields Ltd. (WCL), a Subsidiary of Coal India Ltd has been able to provide cheaper landed price coal to State & Private Gencos of Central, Western and Southern India. This effort has helped Power Plants in reducing power cost which will lead to cheaper Power to its consumers.
State Gencos of Maharashtra (MAHAGENCO), Madhya Pradesh(MPPGCL), Gujrat (GSECL) & Karnataka (KPCL) along with other private power producers are largely dependent on WCL for their coal requirement. MAHAGENCO has the largest share of more than 50% of the dispatch followed by MPPGCL with 12% share.
Coal production in WCL went down to a level of 39 million tonnes during 2013-14. Unviability of projects & non-availability of land were the major issues restricting the company to grow further. Power consumers had no option, but to take coal from other Subsidiaries of Coal India, viz. SECL, MCL & SCCL. Due to larger distance consumers had to pay more on Railway freight making landed cost of coal higher.
WCL planned for expansion of existing projects and opening of new projects by investing in additional Land Acquisition, employment against land etc. During last 5 years, WCL opened 20 new projects with capacity of 45.64 Million Tonne. These projects contributed 35.8 Million Tonnes production during 2019-20. As a result, production of WCL during 2019-20 increased to the level of 57.6 Million Tonne. This growth is substantial as WCL lost 22 Million Tonne of production during last 5 years due to exhaustion of reserves.
During FY 2013-14, dispatch to MAHAGENCO was 17.60 Million Tonne which has gone upto 26 Million Tonne in 2019-20. The average saving on freight to Mahagenco due to procuring coal from WCL is Rs. 1200 Per tonne.
In order to cater more to Power Consumers, WCL has dedicated its 11 Mines for supply of coal specifically to Power Sector by notifying these mines as ‘Mine Specific Sources’. The saving to consumers on freight cost is partly being shared by WCL by charging small premium over regular price. This has helped WCL to open new mines, which will lead to win-win situation for both WCL & its customers by further augmenting higher dispatches in coming years. It is pertinent to mention that landed cost of Mine Specific coal from WCL is also much cheaper than landed cost of coal from other coal companies to the consumers located in Central Western and Southern region including Mahagenco.
WCL has envisaged an ambitious plan of production from the current level of 57.6 MT to 75 MT in the year 2023-24 and further to 100 MT by 2027-28. In view of growth in production and dispatch, WCL is geared-up to cater to the entire coal requirement of these consumers from the year 2020-21 onwards. It is estimated that the coal requirement of Mahagenco during FY 2020-21 will be around 35 Million Tonne. WCL has already submitted proposal for sourcing their entire coal requirement from WCL which will result in huge saving to Mahagenco on freight cost. WCL has also started dispatch of coal to Private Power Producers against Import Substitution.