Mumbai: Coal India , the world’s largest coal miner, on Monday posted third-quarter profit that lagged market estimates and said a federal ban on mining would further impact production this fiscal year.
Kolkata-based Coal India accounts for nearly 80% of coal output in the country. In November, the central government raised $3.4 billion from a 10% stake sale in the company, marking the country’s largest ever initial public offering.
Demand for coal is forecast to grow 11% a year in India, as the country aims to halve its peak-hour power deficit of nearly 14% over the next two years and triple its generation capacity over the next decade.
Coal India did not provide comparable financial numbers for the year-ago quarter, when it was not publicly listed, but said shipments rose 3% to 110.52 million tonnes. Coal output rose 2.5% to 113.85 million tonnes.
The company said a moratorium on some mining projects, which has been extended till March 2011, has adversely impacted production in the current fiscal year.
India has 10% of the world’s coal reserves, the biggest after the United States, Russia and China, but shortfall from local supplies have grown rapidly with the increase in coal-fired power plants and the country is likely to import 84 million tonnes in the current financial year.
Coal India has earlier said it would likely miss a government-set production target of Rs460.5 million for 2010/11 on account of inadequate transport infrastructure which has led to a stocks pile-up.
Coal India’s April-October output trailed the government-set target by 22 million tonnes, its technical director had said.
Coal India posted fiscal third-quarter profit of Rs2630 cr and net sales of Rs12690 cr .
A Reuters poll of brokerages had forecast net profit of Rs280 cr for the quarter, on net sales of Rs13290 cr.
Coal India has set aside $1.2 billion for overseas acquisitions in the year to March 2011 and is evaluating at least three proposals for buying stakes in overseas coal firms.
Last month, Indian state group International Coal Ventures Ltd, of which Coal India is a member, decided against countering Rio Tinto’s $3.9 billion bid for Australian miner Riversdale, but has bid for a coal asset in Mongolia.
Shares in Coal India, valued at $42.1 billion, closed down 0.5% ahead of the results in a firm Mumbai market. The stock is up 6% from its trading debut in early November.