Interview with N. Sridhar: “We have been striving to produce clean coal while taking utmost care of the environment”

“We have been striving to produce clean coal while taking utmost care of the environment”

During 2015-16, Singareni Collieries Company Limited (SCCL) registered a record growth of 15 per cent in coal production. The company has been a pioneer in the mechanisation of coal mines in India. Today, it uses various modern technologies and operates the country’s biggest longwall project at Adriyala. Recently, it ventured into the power generation business with the Singareni Thermal Power Plant (STPP), which is set to start operations in May 2016, Excerpts from an interview with N. Sridhar, chairman and managing director, SCCL…

What have been SCCL’s key achievements over the past one year?

SCCL has recorded a growth of 15 per cent during 2015-16 with a coal production of 60.38 million tonnes (mt) as compared to 52.54 mt in 2014-15. Moreover, the company has overachieved its target of 56 mt for 2015-16. Apart from coal production, some of the other key areas that have registered a significant growth during the year are increase in productivity (output per man-shift) by 11 per cent, offtake by 11 per cent and overburden removal by 18 per cent. At present, SCCL is ahead of all coal companies in India.

What are the new technologies being deployed by SCCL in coal mining?

SCCL is deploying various technologies such as longwall, shortwall and continuous miners, and has gained sufficient expertise in these technologies. While the use of these technologies has led to an improvement in production and productivity, various business models are being tried as well to further enhance the performance. The company is also planning to increase the number of continuous miners and longwall-based projects, wherever feasible.

What has been the financial performance of SCCL?

The gross turnover of SCCL increased from Rs 141 billion in 2014-15 to around Rs 165 billion during 2015-16, recording a growth of around 17 per cent. The profit after tax has increased by more than 100 per cent. It is estimated to be Rs 10.2 billion (provisional) in 2015-16 as against the previous year’s profits of Rs 4.9 billion and target of Rs 5.92 billion.

What is the status of the recently synchronised unit of the STPP? When is the other unit expected to be commissioned?

While executing all works as per schedule, Unit 1 of the STPP was successfully synchronised on March 13, 2016 and Unit 2 will be synchronised in April 2016. Both the units are expected to be available for commercial operations in May 2016.

What have been the key challenges and achievements for the Adriyala project, the much-talked-about biggest longwall project in the country?

The Adriyala project commenced production in October 2014. It is the biggest underground mine in India having a capacity of 2.81 mt per year, and is equipped with advanced longwall technology. The project faced a number of challenges including delays in equipment testing and obtaining permissions from the Directorate General of Mines Safety, changes in the configuration of equipment for enhancing the mine capacity, delays in drivage of punch entries owing to contractual issues and delays in procurement and installation of trunk belts. Apart from these challenges, strata-related issues were overcome with the assistance of an Australian consultancy firm, Mine Advice.

Currently, the project produces an average of 0.2 mt of coal per month, a record production from a single underground mine. The project is likely to achieve its potential production soon.

What are the challenges in underground mining and how is the company mitigating them?

Safety of miners and ventilation are the key challenges faced by us in underground mining. The company is making efforts to enable safe transportation for miners in steep gradient mines. Further, high capacity haulers and pumps are installed to cope up with the gradient. Man-riding facilities have been provided in all underground mines to reduce human drudgery and improve working conditions, production and safety.

To address the issue of ventilation in underground mines, SCCL has set up ventilation cells in each area for continuous monitoring and improvement in the ventilation of working mines. In addition to efficient ventilation networks, air-conditioning units are installed in some of the deep underground mines such as Adriyala and Venkateshkhani 7. SCCL is further planning to install air conditioning or air chilling units in all deep mines, as required.

What are some of the challenges SCCL is facing and how do you plan to address these?

Apart from safety and ventilation issues in underground mines, SCCL is facing challenges pertaining to land acquisition and diversion of forest lands. A delay in the diversion of forest lands leads to delays in obtaining other environmental clearances. This holds up the commencement of projects, thus affecting the entire production plan. However, with support from the state government, the Ministry of Environment, Forest and Climate Change and the Ministry of Coal, we are getting clearances faster and these issues are being mitigated.

Further, even though the logistics infrastructure is not a major constraint for coal evacuation at present, certain evacuation projects are being planned by the company in association with the railway authorities keeping in view the future requirements. These include two railway lines – from Bhadrachalam Road to Sattupalli (55 km) and Srirampur to the STPP (33 km); and three railway sidings – from Bethampudi railway station to the Koyagudem mine (8.2 km), from Kazipet to Balharshah, and at Mandamarri.

What is the company’s growth strategy in coal mining and power generation?

SCCL has experience of 127 years in coal mining. The company has been striving to produce clean coal while taking utmost care of the environment and catering to the energy needs of southern India. SCCL extends its consultancy services to various areas such as coal exploration and evaluation, mine planning, design and construction, mine surveys, environmental management, and mines rescue.

SCCL is keen to acquire more coal blocks in other states as well as overseas. For the acquisition of overseas coal assets, the company had posted an expression of interest, and received responses from 13 firms. The bids are currently being scrutinised. SCCL will proceed with the acquisition of coal assets after studying the global trends in the coal business. A consultant has been appointed for the same. SCCL is also planning to diversify into other areas like coal washing, and underground and surface coal gasification. The company is in the process of setting up one more unit of 600 MW at the STPP in its second phase. Further, four processed overburden plants are planned to be installed in addition to the existing four plants.

What are your key priorities for SCCL?

We endeavour to strengthen the strategies that helped the company achieve record growth in 2015-16. SCCL has envisaged a year-on-year growth of 10 per cent. For this, we plan to adopt the latest technologies and global best practices. Other key priorities are minimising the downtime of heavy earthmoving and other machinery, reducing the production cost, expanding existing mines, implementing new projects in time to add additional capacity, and acquiring new coal assets. Consultants will be appointed to optimise operations with better strategies, methods and training. We also plan to expedite the development and operations of the Naini coal block. Further, there are plans to enhance the rated capacity of the Jalagam Vengala Rao Opencast II project from 4 million tonnes per annum (mtpa) to 10 mtpa.

Under the new initiatives, the key performance indicators will be formulated and maintained to improve performance at all levels; long-term plans of three to five years will be formulated to facilitate advance action in the form of permissions and clearances and procurement of machinery; a task force will be formed to study all the operations in depth; and operations, maintenance and service contracts will be introduced to improve the performance of various technologies. Moreover, proper coordination and rapport will be maintained with all government authorities to obtain the required clearances in time and regular visits will be made to mining areas.

What is your outlook for the coal as well as coal-based power generation sectors in the country?

Coal-based generation has been the mainstay of the Indian power sector and going forward, its dominance is expected to continue despite the increasing contribution of non-conventional energy sources, mainly solar and wind. India has abundant coal reserves and domestic coal is seen as a safe, reliable and cheapest source for electricity generation. Coal is likely to play an important role for at least the next 10 to 20 years, despite increasing concerns about climate change.

Accordingly, the government has set an ambitious target of 1.5 billion tonnes of coal production by 2020. For this, we need a modern and sustainable mining industry in terms of not just technology and methods of mining, but also the management approach to all mining activities such as health and safety of miners. Apart from technology improvement, focus is required on increasing exploration activities, setting up appropriate policy and regulatory frameworks, and increasing the participation and role of financial institutions.