Bharat Coking Coal, a subsidiary of Coal India Limited and a supplier of high-energy-generating-coal, or coking coal, has entered into a joint venture with Steel Authority of India (SAIL) for underground coal mining aimed at increasing its production.
SAIL, a state-owned steel producer, is a prime consumer of coking coal and a major customer of Bharat Coking. The joint venture will be equally held, with each partner investing Rs250 crore .
Bharat Coking has already announced planned investments of Rs1,350 crore for the next five years on expanding and improving various mines. It has also outsourced a patch in the underground mining area of Moonidih in Jharkhand, to Ukranian-based company Druzhkvoskiy Engineering Plant for six years, to improve productivity. While the Indian company managed to improve its overall production by 3.8% to 24.2million tonnes (mt) in fiscal 2007 from 23.3mt a year ago, it slipped on its targets for a category of coal, which is a key measure of profitability. Its production of power-generating coal from underground mines has declined from 5.4mt in fiscal 2006 to 4.90mt in fiscal 2007 because it had to close unproductive mines
“The net revenues and net profit have come down owing to declining underground production, high cost of production and old mines,” said Asoke Kumar Paul, chairman and MD of Bharat Coking.
Paul reiterated that the joint venture would help arrest the declining levels of production. It is a 100% subsidiary of Coal India Ltd and was a loss making firm until 2005. Bharat Coal turned around in 2005-06 with a maiden profit of Rs202.68 crore.