Business Line reported that a fresh debate seems to have emerged on whether coal miners will continue to extract till March 2015 from the blocks de-allocated following the Supreme Court verdict.
The Supreme Court had allowed the companies to mine coal till the end of fiscal 2015.
The 25-odd miners including Hindalco and Jindal Steel & Power Ltd (JSPL) will end up paying a penalty of about INR 9,340.71 crore by the end of 2015 fiscal based on their output projections. But, industry experts feel that there is a high possibility of miners cutting down their output or stop activity till the Government comes out with a clear cut action plan.
There are also those who believe that given the international prices, it may still be beneficial for the domestic players to continue with the extraction despite the penalty.
One of the industry players said that “It will be entirely the miners’ call depending on the economic viability of the project.”
While domestic coal of 5,900 kcal/kg gross calorific value sells at around INR 2,590 per tonne to INR 2,800 per tonne, the free-on-board price for Indonesian coal of 5,900 GCV is currently around USD 62 per tonne to USD 63 per tonne.
The South African 5,500 GCV coal is priced INR 4,543 per tonne to INR 4,604 per tonne. GCV is the heat produced from the fuel. Naveen Jindal-owned Jindal Steel & Power Ltd and its subsidiary will be the worst hit with this penalty as it works out to around INR 3,314 crore by March 2015. The company has so far invested around INR 50,000 crore on the blocks and the projects based on them. Its consolidated debt is INR 36,500 crore till June 30th 2014.
The Supreme Court had allowed the companies to mine coal till the end of fiscal 2015.
The 25-odd miners including Hindalco and Jindal Steel & Power Ltd (JSPL) will end up paying a penalty of about INR 9,340.71 crore by the end of 2015 fiscal based on their output projections. But, industry experts feel that there is a high possibility of miners cutting down their output or stop activity till the Government comes out with a clear cut action plan.
There are also those who believe that given the international prices, it may still be beneficial for the domestic players to continue with the extraction despite the penalty.
One of the industry players said that “It will be entirely the miners’ call depending on the economic viability of the project.”
While domestic coal of 5,900 kcal/kg gross calorific value sells at around INR 2,590 per tonne to INR 2,800 per tonne, the free-on-board price for Indonesian coal of 5,900 GCV is currently around USD 62 per tonne to USD 63 per tonne.
The South African 5,500 GCV coal is priced INR 4,543 per tonne to INR 4,604 per tonne. GCV is the heat produced from the fuel. Naveen Jindal-owned Jindal Steel & Power Ltd and its subsidiary will be the worst hit with this penalty as it works out to around INR 3,314 crore by March 2015. The company has so far invested around INR 50,000 crore on the blocks and the projects based on them. Its consolidated debt is INR 36,500 crore till June 30th 2014.
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