We are very pleased and honored to host Mr. Pramod Agrawal, Chairman and Managing Director of Coal India Limited, for an investor call post the Q3 FY 2021 results, and also to discuss his views on the recovery of coal demand in India. Along with him, we have Mr. Sanjiv Soni, Director of Finance; Company Secretary, Mr. Viswanathan; and other head of departments. On behalf of ICICI Securities, I thank you all for joining this call. Over to you, sir, for initial remarks, and then we can have a Q&A. Thank you, and over to you, sir. Thank you, Rahul. Thank you all for attending this conference call. As you know that post-COVID, things are improving. The demand for energy is increasing. In the last two, three months, November, December, and January, the energy generated through thermal power stations, means coal-based energy, has increased by about 8%. Unfortunately, that is not getting reflected in our offtake. Mainly because all the power plants who were having very high stock of about 30, 34 days, they have now reduced it to 18 days. In tonnage terms, it was in July, the total highest stock was 51 million tons at the power station, which has now come down to 34 million tons. We have tried our best to compensate this by increasing our offtake in non-regulated sectors. We have increased the amount that was offered in non-regulated sector. We have almost increased it by 60%, 70%, in the sense that last year, till January end, the total quantity booked under NRS in e-auction was about 60 million tons, which has now increased to 92 million tons. This gives us comfort that in this year, against the last year's complete booking of about 68 million tons, we will be doing a booking of about 120 million tons. Our 80% supply takes place to power stations and only 20%, 25% takes place to other sectors. This 20%, 25% cannot compensate the loss that is happening in the power sector. The loss that has happened in the first quarter could not be compensated completely till now. I am quite hopeful that the way the demand is increasing and the way the stocks have depleted, because now 18 days stock is only available in the power station, and they are mandated to keep 19 days demand. Now the offtake must increase and post from March onwards, it will be the supply constraints which can affect the supply rather than demand. We are quite hopeful that the way the country is developing, we will be able to meet all the demand. There will be quite a good demand for our coal. International prices too are rising. We are hopeful that, even in e-auctions, et cetera, we should get a good return. In the first three, four months, there was hardly any premium we were getting. Last month, the average premium was 25%. Till now, on the average, we have got a premium of 16%. We can say that this is a loss compared to the last year, the last year the premium was 30%. In the current scenario, the most important thing is to keep the coal going so that the speed of production can be maintained. That is the most important criteria, which we are trying to follow. This year is a tough period. We hope that COVID is now behind us and coming months will be better. Thank you. Thank you, Rahul. Are you online? Yes, sir. Mallika, can you start the Q&A, please? Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Dixit from Edelweiss. Please go ahead. Thanks for the opportunity, sir. I have two questions. The first one is on sales realization, which is down QOQ. Any specific reason for that? Assessor realization, if you are talking in the per ton basis or you are talking in terms of quantity? No, sir, per ton basis. Price. That's basically because we have not taken any performance incentive this year. We are not imposing penalty because of spot lifting. Because of COVID, the force majeure conditions were there, and it continued till this. Because of these two, the realization is slightly down, assessor realization. Sir, in Q2, the realization was like INR 1,412 per ton, and in Q3 it is down to INR 1,354. I thought that you would be foregoing your performance incentive and not imposing penalty in Q2 also. My question is, why it is down in Q3 specifically? I won't be able to reply this specific question because maybe because the mix of the quality, quantity of the coal is different in this quarter than the last quarter. On average, it should have met I'll have to check, and I'll give you reply separately. Okay, sir. The second question is on receivable. If you can let us know what is the receivable at the end of December and if possible, January. Our receivables are almost constant. They are in the range of INR 21,500, and this December numbers were INR 21,230 or INR 234. In September also, it was in the same range of INR 21,500. Now also in January, it is in the same range of INR 21,600. Whatever we are selling now, we are getting the money. Whatever is backlog, we are finding it slightly difficult to recover that. Okay, sir, I have other questions. I will get back in the queue. Thanks, and all the best. Thank you. The next question is from the line of Rahul Jain from Systematix. Please go ahead. Yeah, hi. Thanks for taking my question. My first is on, there is a notification from the Ministry of Mines, where they are saying that mines which have been allocated post 2015, there will be additional royalty on that, and the Ministry of Coal has to submit its recommendation on that. What do you think would be the liability, and what is the breakup of our mines, which were allocated pre 2015 and post 2015? Most of our mines are allocated before 2015. After 2015, hardly one or two mines have been allotted. Some of the mines were given as custodian for mines, so those mines are being now auctioned. All these mines were something given to us, and I don't know of anything in which they are going to impose any extra royalty on any of our mines. Right. Okay, fine. You're saying that you don't have any liability which will come out of any change? To my knowledge, there is no such liability as of now. Okay, sir. Sir, in terms of your new ventures which you're talking about, like solar cells and some of the other things, what is the kind of capital allocation that we have thought about? In most of the diversification projects which we are thinking or we are exploring, we are not going to take any technology risk or too much of capital risk. What we are proposing that we will form an SPV, get all the clearances, and offer it to some partner who can come along with his technology and who can invest most of the money. From the side of Coal India, the capital investment will be very minimal, in the sense that we'll acquire land and maybe provide the infrastructure. Beyond that, we are not going to do much. You've not summed up any numbers on any of these ventures so far, correct? No. From Coal India side, we have given some numbers, but those numbers are very small. Right. For a five-year project, there may be about INR 400 crore, INR 500 crore that can be something in that range. Right. The rest of the money should come from the partner. Right. Sir, lastly, we have this wage negotiation coming up this year. Have you thought of any possibility of price increase around that? Is it because you will have some pressure from your competitors like solar is also doing very well and things like that we may not have a price increase? Any thoughts around that? We are thinking, and it will come very soon, but it will be very difficult for me to give any date for that. Definitely, we'll more than compensate what we will give as a wage increase. Okay, sir. Thank you so much. Thank you. The next question is from the line of Ashish Kejriwal from DAM Capital. Please go ahead. Yeah, hi. Good evening, everyone. Sir, two questions. One is on debtors. You said INR 21,500 crore. What we remember was at the end of second quarter, it was INR 23,300 crore. Is there anything net or gross amount in that? Secondly, we were expecting this to get some money out from after Diwali, but still we are not getting it. Any course of action on that? See, I don't. INR 23,500 might have been gross. What I'm saying today is the net amount. Net of everything. To my knowledge, in October, November, and to December, this was only INR 21,500. In September and also INR 21,253. It is range bound in that only. Yes, we were expecting that it increase after Diwali. Unfortunately, the listings are not what I was expecting. In December, actually, the listing was less than last year because in November, October, September, on all those months, it was much more than. Am I online? Am I audible? Yeah, sir. This is audible. Some beeps, so I thought I got disconnected. I was expecting that same trend will continue in December and January, but unfortunately, the listing was not so good because all the power plants are reducing their stock instead of taking coal from us. We have missed that time. Now, as the demand is increasing from the coal-based energy, and I expect that in November, December, January, all the three months, the increase is in the range of 8%. Now we are putting pressure on all our consumers to make the payment. Maybe till March end, we won't be in a very strong position, but from April onwards, when the demand will further increase, definitely we'll put all the pressure. Sir, in case you are not getting it till March, then our free cash flow will be very low. Is there a possibility of any incremental dividend on it? All the money is stuck with the debtors. It is not all the money stuck with the debtor. I had promised that this year the dividend will be in the same range as the last year. For this year, I should not say much beyond this, but then there will be another interim dividend and then final dividend. We will be giving dividend continuously at regular intervals. Sure. Sir, secondly, on FSA realization, are we seeing any shift in customer preference? Like customers who have bought on a linkage coal option at a higher premium, now they are getting it at a lower price in the e-auctions. Have you seen some kind of shift in that customers, because of that our FSA realization was low on a year-over-year basis? Some customers have shifted out, but that total quantity out of that shifting is not very significant. It is either five or seven million ton, in that range. That is not something very significant. We are not going for Tranche five as of now, so this is putting lot of pressure on the customers and they are now not quitting off, not exiting the FSA. Okay. Fair enough. Thank you and all the best. Thank you. The next question is from the line of Raashi Chopra from Citigroup. Please go ahead. Sir, on the CapEx, are you on track with INR 13,000 for this year, and what should we expect for next year? This year we are targeting for INR 13,000 crore. Next year it will be INR 16,000 crore or INR 17,000 crore. All this CapEx are on development of our evacuation system. That major constraint that we are facing is basically that how to evacuate the coal. As I had mentioned earlier also, we are mechanizing lot of our mines in the sense that evacuation which is taking place from the truck, et cetera, will be done through coal handling plant and directly loaded to the wagon. A lot of money will be spent on those things and inducting some high-grade machines so that productivity can be increased. Sir, how much until January? Sorry to interrupt, ma'am. Your voice is breaking. I would request you to move to a better reception area. I said, how much is spent until January? How much CapEx? Till January, we have spent something like INR 9,300 crores. Okay. Sir, just a bookkeeping question. What was the total dispatch growth was 9% in the quarter. What was the breakdown between power and the non-power sector in terms of growth or volumes? Do you have answer? The power and non-power dispatch in the last quarter. Raashi, can I give you this reply separately, but 9% is overall, and I think 20% was in NRS and almost 7% in power. These are just going by my memory. Okay, just a minute. Sorry, I won't be able to give you right now. I will check myself. I'll give you separately. Okay. No problem. You said that the e-auction premium in the last month was 25%. Did I get that right? 25% is the premium. Power, non-power put together, Raashi. All right. That's it. Thank you, sir. Thank you. The next question is from the line of Indrajit Agarwal from CLSA. Please go ahead. Hi. Thank you for the opportunity. Couple of questions. One is more on the medium term side. With the government auctioning so many mines on the commercial coal mining sector and also giving so many incentives, how do you see demands for our coal, particularly on the e-auction side, say two, three, four years from now? In next two, three, four years, these mines will be hardly producing anything. The total auctioned amount quantity, the PRC, the peak rated capacity of all these mines is around 50 million tons. That quantity is not so significant that it can affect. In next two, three years, nothing is going to come out of those mines because they have to take all the clearances and then they have to start producing, which takes lot of time. In the mining business, one cannot start any mine within three years. I don't think that in the medium range there is going to be any challenge. Actually, what is the challenge is to increase the evacuation from our mines. If we can successfully evacuate our coal from the mines, there will not be any challenge. Sure. That's helpful. My second question is on the closing down of underground mines. Any progress on that? What is the kind of savings we can look for, when will that reflect in our numbers? Yeah. Last time I said that we will be closing down 23 mines or upgrading their production in these mines. We have already closed down 11 mines. Five mines will get closed by March 31st. Seven mines, they are planning to upgrade. If they are able to upgrade them, I mean, to increase the production substantially, we'll continue that. Otherwise, we'll close them down again. What is the kind of cost savings that can happen from these 16 mines that we have closed down so far? In 16 mines, we should do a saving of about INR 300 crores-INR 400 crores. Sure. Thank you. I have more questions. I'll join back again. Thank you. The next question is from the line of Pinakin Parekh from JP Morgan. Please go ahead. Thank you very much. Sir, I have two questions. My first question is that if you look at provisions, they have again increased sharply on a quarter-over-quarter basis to INR 500 crore. In the last two quarters, the provisions of nearly INR 850 crore is more than seven times of what was seen the entire FY 2020. What do these provisions relate to, and what's the outlook for this? My second question, sir, relates to dividends. There was a comment in the government quarters that state-owned companies should now look to give quarterly dividends. What is the company's view on this? Quarterly dividends will also be welcomed by all sets of investors, because that will just give more stability and visibility to their cash flows in terms of dividends, sir. The first question about the provisioning. Yes, the provisioning. That is basically of some dues which were not recovered. Three years old dues have to be provisioned in our balances. That's why they have been provisioned. Most of these provisioning we'll get back because these are from governments. These firms aren't really in crisis at this point of time. Most of it will be recovered. These dues are not something from the private sector or something. There should not be any problem on this account. Next year onwards, when we start regulating the supplies, perhaps we'll be able to get all these dues. Second thing is your quarterly dividend. Government has said that there should be more frequent dividend payout, not that once in yearly type of payout. We have already paid dividend once. We expect that another interim dividend we should be in position to pay, and thereafter a final dividend at the time of when the final basis. I won't say that we will be paying every quarter, but at least twice or thrice a year, we will definitely try. Thank you, sir. Just to clarify, while you mentioned that the dues are from the government entities and hence they will eventually be paid, would it be fair to assume that once we enter April 2021, many of these INR 21,000 crore existing receivables from an accounting perspective would have to be provided for if they are not paid fully? Yes, from a cash flow perspective, they will eventually come. Are we looking at possibility that from an accounting perspective, provisions sharply rise over the next one to two quarters? No. About a year back, the total outstanding was only INR 6,000-INR 7,000 crores. These outstandings have increased in this year only, in one year, last one year, or maybe 12, 13 months or 14, 15 months. If it becomes three-year-old only, the provisioning has to be made. I don't expect that provisioning is going to increase. Understood. Thank you very much, sir. Thanks. Thank you. The next question is from the line of Kamlesh from Prabhudas Lilladher. Please go ahead. Yeah. Thanks for the opportunity, sir. One question on the part of capital allocation. Sir, time and again, all the dues continues to come, like say we are partnering with NALCO to invest- Your voice is not very clear. Can you. I was asking the question that some of the other dues comes from the front office capital allocation, like we are partnering with NALCO for investment in smelting capacities, then this SPV for solar wafer and all that. Can we have broadly some capital allocation policy going forward? Though it's very appreciated that we are investing heavily on our transportation side, all these other investments, sir, what is the broad policy on that front? See, as I mentioned earlier also, that most of the things like the new ventures like solar wafer or anything, that will be mostly in the sense that or even coal gasification, we are looking for a partner who can come and invest their capital, and maybe we can share the equity. In the sense that the technical risks and capital risks will have to be taken by him. All these tender will be floated in a way that only if we find it profitable and IRR return is good then only, and a long-term commitment is made by the government for purchase on supply side, then only we will enter into this. As I mentioned earlier also, that capital investment, except for maybe if we go ahead with this aluminum smelter plant, in which case, NALCO has got alumina, which is one of the cheapest in the world, and we may partner there. Otherwise, the capital allocation will be very less. Okay. Sir, lastly, in last quarter, we were very confident that we would be able to grow our dispatches or off take. Even in the last quarter, we benefited primarily because of the weak base. Like volumes were down in last year, like October 2019 to December 2019, by roughly around 20%. On that weak base, we were able to show growth, and our volumes are at the same level that it was around two and a half years or three years back. Now we are saying that there is inventory stocking at the power plant. This theme has been there for the last four, five years, and we are not able to push volumes or grow volumes despite the fact that there has been heavy increases in all alternate fuels, like say, be it pet coke or the imported coal. We are not able to take any benefit out of that while pushing volumes. Really surprised to know on that particular front. Even in the January, our dispatches are down 5%. February, it's again down 3%-4%. The base are not that significant. It's hardly 6% base last year. I couldn't get your last sentence. Hardly? Even last year, we had the base growth in the last year was six percent. Even on those reasonable basis, our volumes are in decline territory. You are right that the growth has not been seen in December and January. December, still there was a positive thing. In January, there was a reduction, an actual reduction in what we did from the last year. We must compare the situation with the overall thing that is happening in the economy. If economic degrowth is around 7%-8%, and about 10%, and it would have otherwise grown by 5%-6%. The difference is about 16%-17% net, and that is in the real terms. If that is the situation, it is rather difficult. The only option for us was to capture the NRS sector and to go heavily on the e-auction thing. We have gone very heavily on that. We have already booked about 92 million tons. This coal is getting dispatched. The reduction that has taken place in energy sector cannot be easily compensated through NRS sector. NRS has become completely dependent on imported coal. We have to give them confidence that whenever they require, the adequate quantity will be offered to them. That is something we are trying to do, and once we are successful, we will definitely. The consumption can be indicated from the fact that the power plants have reduced their stock by 14, 16 million tons. The total stock now is 18 days stock is there with the power plant. They cannot reduce it further because the CEA mandates that 19 days of stock has to be maintained by them. I'm quite hopeful, and I have a reason for that, because the 18 days of stock is not something which they should maintain, and they cannot further reduce it. I'm quite hopeful that in coming months, the stock of stock will improve. If the economy does not grow, one cannot predict beyond certain points. Thanks a lot, sir. Thank you. The next question is from the line of Tarang from Old Bridge Capital. Please go ahead. Hello. Good evening. My question is specifically on your plans of wanting to foray into aluminum smelting. Essentially, while I understand that you have coal and you can tie up with NALCO, but just wanted to understand what's the strategic thought process about entering into hot metal production when there is a global surplus domestically as well as internationally. See, the growth in aluminium consumption in the country is increasing. Our consumption per person is almost the lowest in the world. I don't remember the exact figures, but it is less than half of the annual average consumption of the world. Whatever projections have been done, they say that there will be improved demand and there will be deficit in the country. I'm not saying that we have entered into it. We are just exploring that possibility. We are getting the feasibility studies being done. Once the feasibility study is done and we find it profitable, then perhaps we will take up further steps. As of now, we are trying to form the SPV so that we can do the groundwork. It doesn't mean the actual investment has been taken, but rest assured, if the feasibility is positive and if there is a possibility of selling aluminum in the country, then only we'll go ahead. Okay. sir, just to double-check, while for the other projects, you said that the capital risk and the technological risk will rest with someone else. Would the same principle apply even here? NALCO in the sense we have not finalized what will be the thing, but in this also, we will like to induct some partner who can come with a good technology. Okay. Thank you, sir. Thank you. The next question is from the line of Arun Kumar from Mellon Capital. Please go ahead. Yes. Good evening. I wanted just to ask the demand perspective going ahead. One more question that I wanted to ask about your new ventures that you had taken into your solar power and all. What is the CapEx plan over there? How soon do you expect them to venture out? About the demand, I said that demand must rise in coming days because the stock already in the powerhouses is depleted. They cannot further go down without risking the power situation of the country. We are putting pressure on them so that they can increase their stock, because in April, May, June, in the coming summer season, it is likely that the demand will increase tremendously. To my mind, the demand must increase in coming months. On the last three months also, we are seeing that coal-based energy demand has increased by 8%. That trend, if it continues, then the coal demand will definitely increase. Coming to the new ventures, I have mentioned that we have allocated very little money in next two, three years. What we are looking for is somebody who can come, and we facilitate them to establish the thing. These are the high-tech investment. Solar power is a high-tech industry, and in which it will be very difficult, without a person who is going to take that technology risk. In solar power, definitely solar ventures in the sense that solar power, et cetera, installing the solar power, et cetera. We will like to go ahead and invest so that Coal India in coming years become at least this carbon neutral company. Whatever we are using energy for production of the coal, at least that much carbon is neutralized by producing solar energy. Actually, in certain pockets where we can use the solar energy captively, their savings will be huge. Okay. That would be all. Thank you. Thank you. The next question is from the line of Parthiv from NVS Brokerage. Please go ahead. The next question is from the line of Vineet Maloo from Birla Sun Life. Please go ahead. Yes. Good afternoon, sir. Sir, my question is again regarding this capital allocation plan only. Although you said that you are still evaluating the financial and technical parameters. If you look at especially aluminum industry, even though it might look like good industry from the outside, none of the players actually earn a double-digit ROC in the country. All of them are stuck in a single-digit level. Whereas if you look at Coal India's financial, they are significantly superior. We are not able to fathom why would Coal India want to steer away into such an industry rather than use the cash within existing business or green business like solar power generation or return it to shareholders. Entertaining the thought of entering aluminum industry is very perplexing to us as shareholders. Vineet, there are two things. First thing, we are not saying that we are not going to invest in solar power. We are trying to maximize the solar power because there, even if we create infrastructure which is sufficient for our captive consumption, we will make lot of money. Means in the sense that power, whatever we are procuring from the grid is INR 7-INR 7.5 per unit. Whatever we do, the cost of this will be not more than INR 3, INR 3.5. There will be saving on that account, which I think should be a good investment. Solar energy is one thing where there's a future life. As an energy company, we must look into that. Paying to the dividend, we are committed to pay good dividend every year. In this crisis year also, we are trying to maintain the level that was seen in the last couple of years. Now coming to this, we will go into it only if we are satisfied that the type of money we are making. The type of money which we make in coal mining is not possible anywhere else, because in certain pockets, there are huge return. Coal's future is limited, and hence if Coal India has to survive, it has to look for some business where we can do well. In this case also, if we find that the returns are good, then only we will venture there. As you are saying that there's a single-digit ROE, et cetera, then perhaps, we will explore that front and then come back. Okay. Sir, when do we expect to take this decision? In what kind of time frame? It will take another year or less six months. Not in coming six, seven months. Let the feasibility report, et cetera, come. We have engaged consultants for doing those things. Let them come, we'll decide on that. Not five, six months, no the investment is going to be made. Right. No, I understand that. Okay. We'll wait for another quarter or two, and we'll again discuss this. Thank you, sir. Thank you. The next question is from the line of Rakesh Vyas from HDFC Mutual Fund. Please go ahead. Yeah. Hi, sir. Good afternoon. A couple of questions from my side. One, you highlighted that the e-auction premium till now is almost 16%. If you look at the last two quarters, essentially it's probably lower than or around single digits. Essentially, the next two quarters should see significant improvement in e-auction realization. Is that a correct hypothesis? What I said that till now, the average realization from e-auction is 16%. In the last quarter, it was about 25%. First quarter was very less. Second quarter, it was slightly high, and then 25% last quarter. Since January, it is 25%, average is 16%. That is my reply. Sure. around INR 1,500 kind of realization that we reported in third quarter, fourth quarter should actually see a significant improvement from that number? I hope so, because the response that we are getting is high. How the market turns is difficult to understand, and the international market is also high. I hope it will increase. We have booked 92 million tons. Another 30 million tons will be booked in these two months. Even if it increases to 30%, then 16% may go up to 17%, 18%, but beyond that, it will be difficult to expect this time. Sure. What I was trying to highlight or get more sense, sir, is that the offtake has been reasonably lower. It's still strong, but most of the offtake that would have happened in last six months is of the bookings that were done in first and second quarter, where the premiums were reasonably lower. The bookings that were done in last three months, where premiums are higher, will start to reflect same in next one or two quarters in the P&L. Is that a correct understanding? Of course, sir. Offtake price will definitely increase because in the last quarter, whatever booking has been done is at higher rate. That you are right. Okay. That helps. Secondly, sir, despite all the uncertainties, et cetera, for next year, in terms of our preparation, both from the production and from the evacuation perspective, what is the kind of growth that one can safely assume if demand bounces back for us? Safely if you are safe with 10%-12% type of growth, we should be easily available. In the first three months this year, the growth was not there, and actually there was degrowth of over 20% or so. Still we are closing at almost what we achieved the last year or slightly higher on that. Next year achieving 12%-13% growth should not be difficult if we start the beginning of the next year with a good growth. In those three months, the growth can be very significantly high, and on the average, that will help us in achieving a good growth. Essentially for the full year perspective, 12%, 13% growth, demand permitting should not be an issue with all these constraints normally that Coal India operates within, either in terms of production or in terms of evacuation, et cetera. To my mind, it should not happen because today also, if there is a demand, we are facing huge demand problems in two, three subsidiaries like MCL, EBA area, in CCL, in BCCL, ECL. All these areas, if the demand would have been there, our lifting could have increased substantially. Actually, in ECL, et cetera, we are unable to produce because the demand is not there. I'm quite hopeful that in next year, if there is a demand, we should be able to get production increase by 12% to 13% easily. One, just for clarification purposes, you have been talking about maintaining last year's dividend. Just for clarity, when you are saying this, does this account for the DDT benefits? Essentially, the actual payout from Coal India, including DDT last year, was more than INR 15 or so, or around INR 15. This year, DDT is not there, does that account for DDT? Rakesh, will it be prudent for me to give such a specific reply? Okay. I'm again assuring that you will not be disappointed. Great, sir. Thank you so much, and good luck. I forgot to mention, Rakesh. Actually, if in this difficult time when our production was not as high as we were expecting, our dispatches were slightly lower than last year, our cost of production has reduced by 3%. I missed out that in my initial remark. To my mind, that is a great achievement for Coal India. For the first time, we are seeing that there is a reduction in cost and in total revenue expenditure. Last year, for nine months, there was INR 56,000 total expenditure. This year it is INR 54,000, which amounts to almost 3% reduction. I think I'm quite sure that this trend should be maintained, and our labor is decreasing by 5% every year. If we maintain this trend, then the profitability should not be an issue if there is increase in demand. Great, sir. Reassuring to hear that. Thank you so much, and best of luck, sir. Thank you. Thank you. The next question is from the line of Noel Vaz from Ashika Stock Broking. Please go ahead. Yes, sir. Most of my queries have already been answered, but I just wanted to know specifically, regarding BCCL, the offtake and the production has been impacted for FY 2021. What is the specific reason for it, sir? See, BCCL is a coking coal producing company. But that coking coal was basically being used for power coal and rest of the time, that coal was easily listed. This year we are finding difficult because power plants are finding it cheaper to source coal from other companies. That is basic problem with BCCL. Now we are trying to sell that coal for non-power purpose. To some extent, we have succeeded in the sense that we have tied up with Tata to wash their coal and maybe INR 2 lakhs, INR 1.5 lakhs ton every month they will be washing, and that will yield us very good result. We are trying to strengthen their washeries so that the washed coking coal can give us premium. We are trying to sell their middling. This year has been particularly difficult because they were not prepared for such a case. We were relaxed in the sense that since the coal demand is there's no need to work on natural advantages that BCCL has. I think that the way they are working in next six months, they will be able to improve upon their working, and then their demand as a non-regulated sector will be huge, and that will help BCCL to come out of the situation. Okay. Just one other thing I just wanted to clarify. The rail connectivity projects at the Lingaraj Silo and the MCRL, that is Talcher-East Rail Corridor, they are both expected to be commissioned by the end of March. It is reasonable to expect it around that time or what has the process been so far? Just held up because of one house there. Okay. Only 50 m connectivity is left. We are following it up with district authorities on regular basis. If that is removed, and they have assured me that within seven, 10 days it will be removed. It is about three days only. There's no reason that we should say that Lingaraj Silo connectivity cannot be completed before March 31st. That Eastern Rail Corridor, the testing has been done, and diesel engines have run on that track. To my mind, there's no reason that it will not be completed by March 31st. They have assured me that everything is ready, and perhaps before March 31st it will be inaugurated. Okay, then. That's all. Thank you, sir. Thank you. The next question is from the line of Amit Dixit from Edelweiss. Please go ahead. Yeah, thanks for taking my question, Pramod. I have two questions again this time. The first one is on OBR expenses. While in last two quarters, Q1 and Q2, we saw some reversal of OBR expenses, but this time again, they are in positive territory. Is it safe to assume that now we are done with preparing spaces and for production, and we are all geared up to increase production? To my mind- That's interesting. It is right what you are saying. Basically, OBR problem we were facing in Gevra, Dipka, and all the mega mines, where actually OBR removal has not been to the sufficient level. We are trying to increase OBR removal further. This quarter, we were facing lot of problem of access roads, because of which OBR was not up to the expected level. Still, our growth has been 20%. If we have to keep our mines in readiness to meet any demand, sudden increase in demand, then OBR removal is a very critical thing, and we are emphasizing on that. Over the year, if you see on the 10 months, our OBR removal has increased by 20%. Still in certain mines, we are facing the situation where OBR removal has to take place furthermore so that production becomes easier. Is it fair to assume that going ahead, this will be in positive territory only, this OBR adjustment provision that we have? It was in positive territory. The second question is on essentially tax rate. We find that this quarter tax rate is around 35% compared to 27% last quarter. Any one-off reason for that, and what tax rate will you guide for the full year? I couldn't get your point. The tax rate. Our rate of tax is 35% in this quarter. Yeah. Tax rate. [Non-English content] There is a holding of dividend amount of INR 508 crore, for which we have provided INR 128 crore. This is one thing, INR 128 crore, which this has been provided for, and it will be released after the dividends are released in coming months. WCL from a loss-making company has become a profit-making company, and hence there was slight increase in the tax. These are all accounting thing. The tax rate is only 25%. We have not reverted to anything back. Okay, got it. For the full year, will it be slightly higher than 25%, even go back to like 30% or something? No. We will remain in the 25% thing. We have opted. We have opted for this, but some tax assets which were created earlier, which are being released or something of that accounting thing is taking place because of which this higher thing has happened. In coming months, it will get stabilized. Okay, sure. Thanks, sir, and all the best. Thank you. The next question is from the line of Vishal Chandak from Emkay Global. Please go ahead. Yeah. Thank you very much for taking my question, sir. Sir, as just Amit mentioned, there is an OBR which goes on a negative zone generally, for the last two quarters, which moved to a positive territory this quarter. Is it possible to share a plan for the OBR going forward? As in, what kind of numbers or cubic meters do we plan to do on a quarterly basis? The way we have a plan for annual coal production, can we do something like that on that so that at least it's more predictable. Coal production into 2.2 times. That should be the average OB removal. Because there was a backlog in the last few years, this year has been slightly higher. Next year, again, it will be slightly higher, but thereafter it will stabilize in the territory of 2.2, 2.3. Very negative provisioning for OB removal is not a healthy sign for any mine. It will be always proven that we should do commensurate OB removal so that quality improves, so that productivity can be improved. No, I completely agree on that part. Basically, it means that when we are doing provisioning, that means whatever was planned as per the mine life has not been achieved. A provision has been created, right? There was a backlog issue seen the last three, four years. Continuously, we were removing OB in the range of 11-15 million cubic meters. That created a situation that in this year, verticals were created in many of these mines, and then after rains, we tried to increase the production. That was a constraint. Secondly, it affects the quality also. We have been insisting right from the beginning in this year to remove OB, and I think we have been successful to a great extent. Sure. My next question again was coming back to your investments in the aluminum business. I just wanted to highlight two points. One, Hindalco has clearly said that they do not want to set up more smelters in India. When we look at NALCO, bunch of its profits are accumulated out of sale of alumina and not aluminum. Clearly, investment in aluminum smelter or partnering with them, I don't know how so far would it be feasible from Coal India's perspective, given the fact that the ROE in mining business is significantly superior and no miner in the world generally, other than Rio Tinto, has invested in these smelting capacities. This would actually be not a very significant value-accretive step in my view. I earlier mentioned also that we are exploring many things. It's not that all the things that we are exploring will be achieved. We are looking for things where Coal India could invest so that it remains a economically viable company in the coming years also. As a coal company, it cannot survive for long. The first option is definitely the energy thing, solar energy thing or renewable energy, where we are definitely going to invest something and the returns will be high. All of you agree that that is an area in which we must invest. Aluminum business is something that we are exploring. We are doing our due diligence. We have appointed a consultant, and as a government company, we cannot keep anything confidential. All the things that we are exploring is in public discussion. Doesn't mean that we have already invested or we are going to invest. We are looking for opportunity. If we see that there is a good ROE, then only we'll invest. Let's wait for one more quarter, and then perhaps I will be in a better position to reply for all these questions. That's very helpful, sir. Lastly, if I may squeeze in one more. What should we take as a production guidance for FY 2022? For 2021, would it be fair to assume that 600 million tons looks a tall order as of now? To my mind, 600 million tons is not difficult. It will depend how the dispatches take place in coming few days. Not few days, means two, three weeks. If the dispatch do not improve significantly, then the stocking of the coal is something which is not desirable. If dispatch is good, then the production is not a problem. Crossing 600 should not be a problem. Next year, I am definitely targeting something 12% to 13% of growth, even more. Again, this stock of this year and the demand next year will affect our production next year. Coal should not be stocked beyond a point. Its quality deteriorates over a period of time. We have to take that also. That also we have to keep in mind. Sir, when we are talking about 600 million tons, we are essentially saying that we'll have an output of 2.2 million tons per day for the fourth quarter in terms of dispatches. I just wanted to confirm, are we on that run rate? We are on run rate. We are doing more than 2.2 nowadays. Achieving that type of production will not be difficult. Dispatch is still in 1.8, 1.9. If it touches to two, which we touched last year, production will be easy. Fantastic. Sir, that's all from my side. Thank you very much, sir. Thank you. The next question is from the line of Pulkit Patni from Goldman Sachs. Please go ahead. Sir, thank you for taking my question. Just one question. You have been highlighting about focusing on some of the import customers and trying to supply them Coal India coal. Can you highlight any steps that you have taken, given what's happening in the international markets? Any steps that we have taken in order to convert some of those imports into domestic coal supply. Okay. We have taken many steps. First thing, we have created another e-auction window just for import substitution and perhaps import substitution. 85, 8 million tons. Okay. In that, we have booked about eight million tons of coal. We have relaxed the ACQ requirement from 75% to 80%. We have said that beyond 80% also, if somebody is demanding, we will fulfill. In many of the plants, you will see that we are supplying more than 100 million tons. I mean, 100% of their requirement in the sense. In certain plants, whatever their committed quantity was, we are giving more than 100% to them. To that extent, for power sector, wherever for blending purpose coal was being used, it has reduced now by 65%. Even for the power plants which are located on the coastal area, we have approved them, and since the price of the imported coal, plus the shipping charges, et cetera, have increased, they have taken coal from I can give you some names also, like some power plants have started taking coal from Eastern Coalfields Limited. The North Indian plants of Punjab, et cetera, Nabha and Talwandi Sabo, they never used to take coal from Coal India. Now they are taking coal from us. All these power plants. In power sector, we have been quite successful in replacing the imported coal. In non-power sector, we were not able to supply earlier. We are supplying to all the non-regulated sector as well. Because of that only, these e-auction volumes have increased from 60 million tons to 92 million tons. All this coal would have got imported if we would not have supplied to them. Sir, could you highlight non-power coal that you are supplying? What is the average calorific value of that coal? One constant complaint we hear from non-power sector is about the quality of coal. Any views on that? See, non-power sector, the whole range is there. There are certain non-power sector consumers who require very high calorific value coal, which is not available with us. To them, we are not able to tackle, like cement manufacturers. Sponge Iron, et cetera, who are taking coal on the range of 4,500 to 5,000 GAR coal, we are able to supply, and many of them have started taking 60%-70% of their requirement from us. We are now working constantly on improving the quality of the coal. The first thing that we have done is improve upon our OBR so that the inadvertent mixing of the soil that was taking place with the coal has been stopped completely. Secondly, instead of using that blasting method, we have increasingly been using the surface miner. Whatever ban, et cetera, is coming in Indian coal can be separated at the time of production. This is taking place continuously. All these specific issues are being taken care of. We have already introduced a third-party sampling. Wherever the complaint is being raised, we are requesting the consumers to do a joint sampling thing of things again. Coal India is always willing to welcome anybody to see our mines and to see that whatever the coal we are supplying at the dispatch point. That has definitely increased the confidence of the consumers. We are constantly interacting with our consumers. Actually, I myself have held three or four meetings with the consumers, and the points that they have raised, and they are general points, we are trying to tackle them very earnestly. I think in last one year, the consumer satisfaction has improved tremendously. Sure, sir. Thank you. That's it from my side. Thank you. The next question is from the line of Rahul Jain from Systematix. Please go ahead. Yeah. Hi, sir. Just one more question I had. Sir, your CapEx over the years has gone up very dramatically, and you're giving a guidance of around INR 16,000 crores for next year. There's a very big contradiction in the statement that you yourself are looking at coal not having a future. Why can't we look at more of outsourcing, more of low CapEx kind of production, so you conserve cash for your future diversification and things like that? Coal India has not invested properly in its capital building. We cannot continue to supply coal at higher levels unless we invest in I am giving you examples where we are investing. Numbers. What number I can see? We have invested something like INR 3,000 crore this year for HEMM, heavy equipment machinery. Maybe next year again, this number will increase. Unless we invest in this, quality coal and coal production cannot be increased from our mines. Still we are producing about 30%-40% of coal through our labor. It is very critical for us to improve the productivity of this labor, this can be done only if, in the larger mines, we deploy very large equipment. Small equipment, they will never achieve the thing that we are targeting for. That is one thing. Land has become costly. We have to spend on land. Earlier we used to get the land free of cost from state government. Actually, the state governments have always been objecting, so there were always disputes. Actually, we have to pay a reasonable state government for their land also. In this year, again, we are investing something like INR 2,000 crore to INR 2,500 crore on this issue. Third thing is mechanization of the evacuation process. As I had mentioned in earlier thing also, that we have identified 35 big coal handling plants for First Mile Connectivity Project. I had promised that by March end, the work on the ground will start or the work order will get issued of that 31 project. Not 31, 29 projects we have issued the work order, two more LOA will be issued tomorrow or day after. Next, two will be issued in this month and another two will be issued next month. All these are very critical. See, coal is going to survive for another 20, 30 years. If we don't supply coal and if we don't supply at a lower cost, it will become all the more difficult for Coal India to survive. All these environmental issues are also significant. We have seen during the pandemic on the shutdown period that our mines were operating, but our transportation was not taking place, and the environmental situation improved tremendously. All the study says that the production of the coal does not impact the environment as much as this transportation through vehicles do. This mechanized transportation is also very critical. Third thing on which we are investing heavily is basically rail connectivity. There are four, five projects which were taken up earlier, which were not moving fast. Now we have created a situation that by monitoring them regularly, that all these projects are now working, and within next two years, all these projects will get completed. We are not wasting money. We are using money to invest. No, sir. Coming from that, your customers, there's hardly any thermal capacity addition in India. In fact, NTPC itself has said that they will not add any more thermal capacities in India. Who do you think is going to buy a lot of this coal that you plan to increase capacities and do so much CapEx? I just want to understand what is your thought process over the next five years, because eventually you will have to end up generating power, right? First thing, there is lot of capacity in India which is not under production. If the India has to grow, this capacity will be utilized. Second thing, power plants are operating at very low PLF. This PLF has to increase if energy consumption in the country increases. Third thing, whatever we are producing, even if suppose we don't go for increase, we cannot continue to transport or evacuate in the old manner as we were doing earlier, because that creates lot of environmental problems, et cetera. Third thing which I wanted to mention, if these projects, whatever capital investment which we are committing, is going to take place in next five to six years, is not going to happen tomorrow or day after. If the demand does not increase, then those major investment, et cetera, which we take in phases. We'll stop there and we will not develop the mine. Our CapEx will reduce if the demand is not there. CapEx is not something like installing a factory. Coal mining is not something like installing the factory and not running that. Here, whatever CapEx takes place is in land development, rehabilitation, all those activities. Those will not take place in case the demand is not there. Our whole CapEx is linked to demand. Right. Sir, lastly, how much was our cash balance as of December 31st? December 31st, cash in our banks was about INR 12,000 crore. Okay. Thank you so much. Yes. Thank you. Thank you. you. The next question is from the line of Anuj Sharma for M3 Investment. Please go ahead. Yeah. Thank you. Sir, I just want to understand what are the constraints, chiefly external and internal, in a mine closure? Typically, how quickly can we accelerate this process? First thing is, we don't close a mine unless the last mine also is evacuated. That was the principle we were following. We are going to change this. If the last mine has become uneconomical, then we should leave that coal and come out of it. If that thinking changes, then lot of mine closure can take place. Second thing, I would say there was no monitoring. In these last two years, we have been closing the mines, and actually there are withdrawals from the mine closure fund. This year also, there is withdrawal of about INR 500 crores. Last year again, there was a withdrawal of more than INR 600 crores-INR 700 crores. Mine closure is now taking place. Earlier, it was a thinking that we should not close the mines unless even the last bit of the coal is not exhausted. Now that thinking is changing, and we are closing the mines. All right. Chiefly, most of the constraints are internal. There are no external approvals and constraints which slow your mine closure process. To my mind, there is hardly any external pressure or an external constraint. All right. My second question is related that once a mine gets closed, how efficiently are the excess or the surplus manpower deployed to another mines? If you are talking in the context of closing the mines that we are doing because of non-profitability, am I right? That's right. Okay. I understood the word mine closure in the sense final closure. You see, the manpower is reducing rapidly. The range that I said is 15,000 every year. 14,000 to 15,000 it is reducing every year, and it's likely to increase further in the coming years. In many of the mines where we are closing down, they are all old mines. There is some natural attrition that takes place, and certain officer manpower are required in other mines. We shift those manpower to those mines. Though it is a difficult task, if there's no work at all, the shifting takes place. Like the 80 mines that we closed down in last three or four years, initial manpower was 16,000 or so, and now the manpower left is around 4,000 or 5,000. If I can give you exact figures later on, that is the range I'm talking about. Actually, there was reduction of 12,000 manpower. Another point that we have found that by closing the mines, even if we pay the labors at their full wages, we save a lot of money because the excavation is so small that overhead costs, et cetera, are very high, and even the price of the coal that we get is not sufficient to meet the overhead cost. It is basically quite a good proposition to close down these mines or to suspend the production from these mines. All right. Thank you so much. Thank you. The next question is from the line of Rahul Modi from ICICI Securities. Please go ahead. Sir, just wanted an update on the ESG report that you had mentioned that you're working on through a vendor. When should that come out? Any thoughts on the ratings? By February end, it should be out. KPMG is working on that. They are likely to submit draft report in a day or two. Might have submitted in the last day. I don't know about that, but they have given that before February 15th, they will give the draft report, and maybe by the end of this month, they will give the final report. Right, sir. Thank you. Thank you. The next question is from the line of Vishal Chandak from Emkay Global. Please go ahead. Mr. Chandak, please go ahead with your question. My question got answered. Thank you so much. Thank you. The last question is from the line of Saurabh Bansal from Star Finvest. Please go ahead. Yes, sir. Hi, good evening. Thank you for taking the question. My one question is that in financially in 2019 and 2020, the average realization per ton of coal has been somewhere close to INR 1,530, INR 1,540. In this year it has fallen down to INR 1,420 almost. A decline of 8.9%. Going forward to financial year 2022, 2023, and maybe at a longer-term period, what could be the average coal realization that one would expect? To my mind, the coal realization should improve significantly from what we have achieved this year. Whether we achieve the INR 1,500+ that we achieved the year before is difficult to say. It will depend how much demand is there, because most of this increase takes place because of the premium that we get in e-auction. We have improved the e-auction quantity. Quantity-wise, it has improved more than at 60%. Still, the realization was in the range of more than 40% premium that we got in the last year, and this year it is 16%. The difference is basically coming out because of that. I'm quite hopeful whatever loss we suffer because of reduction in the price, the average realization will make to higher production. Higher production is higher sales of the coal, and secondly, reduction in our own cost of the production, which increases. Right, sir. Thank you. Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Mr. Rahul Modi from ICICI Securities for closing comments. Thank you very much, everyone, special thanks to Mr. Agrawal for giving so much time and explaining each and every detail about the progress in the company. Thank you very much, sir, once again.