Ladies and gentlemen, good day and welcome to the Coal India Limited Q4 FY21 results conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sameer Goyal from ICICI Securities Limited. Thank you and over to you, sir. Yeah. Good evening all. Thank you for joining this important call. We are very pleased and honored to host Mr. Pramod Agrawal, the Chairman and Managing Director of Coal India Limited, for an investor call post the Q4 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, Mr. S.N. Tiwari, Director of Marketing, Mr. Viswanathan, the Company Secretary, and other head of departments as well. 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, sir. Good evening, friends. It's really a pleasure to interact with you after declaring the fourth quarter 2021 results. This was a tough year. Tough because we are operating in an open area, which gets infected by this disease very easily, and this reduced the demand in the market. This affected our manpower very severely, and to move about was difficult. We could continue our production, we could continue the dispatches. The dispatches were not much less than the last year, nor was the production. Production was less by less than 1%, and dispatches was less than by slightly more than 1%. Actually, in the month of March, suddenly the demand reduced and whatever we were expecting that the dispatches will improve in January, February, March, it did not occur. All the power plants were running very high in the stock, so they started reducing the stock. That affected our dispatches. However, with new year, new hopes have risen. In April, May, June, the dispatches have been very good. Our production also has been quite good. All these details have been posted on our website. I would rather stop here and take the questions rather than getting into the details. If you need some details, perhaps I can address that in any of the answers. Sameer, can we take the questions? Thank you. Sure. Sure, Mallika. We can open for the Q&A. 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 handsets 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. Yeah, thanks for taking my questions and congratulations for a very good set of numbers. I have two questions. The first one is on your production or sales target for this year. If you can provide it subsidiary-wise, that would be great. Sorry to interrupt Mr.Dixit, there's a disturbance coming from your line. I request you to mute your line while the management answers your question. Okay, sure. For 2021, 2022, we have set a very ambitious target, assuming that there will be quite a good growth in this economy, and so the demand for coal will rise tremendously. At the time we were fixing the target, we never thought that in April, May, and June, there will be corona too, or maybe corona 3 will hit the country in the latter part of the year. We have discounted that, and we had assumed that the demand of coal for power itself will be more than 620 million tons. Keeping some, and thinking that some of the most import substitution will take place, we kept the target for dispatch at 740 million tons and 740 million tons, and production target at 670 million tonnes. This was our bid. If you see subsidiary-wise, then the yearly target. Production was ECL 62 million tons, BCCL 32 million tons, CCL 74 million tons, NCL 119 million tons, WCL 60 million tons, SECL 172 million tons, and NCL 163 million tons. The dispatch target for the year was ECL 56, BCCL 32, CCL 80, NCL 126, WCL 67, SECL 196, and NCL 182. I would say these are very ambitious targets. Keeping in mind that the last three months we have suffered a lot. Perhaps this will be a difficult target. We will have to revise this target as the months go by. No problem. The second question is on receivable. Why receivable has declined compared to maybe January, February levels? Still it remains pretty high. What will be the target for FY 2022? What kind of receivable can we expect by end of March 2022? I mentioned the target for dispatch is 740. Our receivables have reduced to INR 17,000 crores. I am targeting that if everything goes well, then it will come below INR 12,000 crores-INR 13,000 crores. Okay, sir. That's great. Thank you and all the best. Thank you. The next question is from the line of Pinakin Parekh from J.P. Morgan. Please go ahead. Yeah. Thank you very much, sir. My first question is on the wage cost for this quarter. What is the outlook for the year? Because there is also talk about the discussions on the wage agreement starting sometime this year. How should we look at the wage cost for the year FY22 on an absolute basis? In the last quarter, the wage cost must have reduced by about 2%. I don't remember about the quarter as such. For the whole year, the wage cost has reduced by 2% or 2.5% in that range. This year there will be wage negotiation. We have calculated that the reduction in manpower will again be in the range of INR 13,000 crores-INR 14,000 crores. If we keep that in mind, then had there been no wage negotiation, there would have been a reduction of about 3% in the wage cost. Since there will be negotiation and it will be difficult for me to say what will be the growth in the wages, even if it is 5%-7%, because keeping in mind that in last the increase was 15% and that was only five years. In this five years, inflation has remained almost constant and the growth in the country per se has not been very high. I think that there will be a very high rise in the manpower cost, a very high increase in the wage cost, but it will be difficult for me, as I mentioned earlier also, to mention anything right now. At the end of the year, even if the wage that increase is taken into account, maybe at the most 2%-3% rise in wage cost would take. I'm just trying to understand that because in the quarter, the wage cost was up around 14% on a quarter-over-quarter basis. Was it just related to any actuarial assumptions? There is one actuarial assumption in- Sorry to interrupt, sir. This is conference operator. Mr. Parekh, there's a disturbance coming from your line. Request you to mute your phone. Okay. There has been an increase in gratuity by INR 1,000 crore suddenly. I'm unable to understand why this actuarial thing has come. Because of that only wage cost has increased or decreased. Otherwise, it's a decrease in the cost in the range of 3%. If there is increase of 14%, that I can't comment right now. I'll have to check that. Sure. My second question relates to the slightly medium term. Diesel prices have been surging, which means that there is cost pressure for the company. There will be higher wage costs. Even if you assume a 5%-7% increase, that's roughly INR 2,000 crores- INR 2,500 crores more. e-auction coal prices are still not breaking out. The company has an aggressive CapEx program. Receivables are not being paid fully to the extent we expected it to. In that context, sir, is the company looking at raising coal prices, especially for the power sector? There is a relentless cost surge on one side, and there is also an issue of receivables not being paid even as the company is doing CapEx. How can the company look to increase profitability from here? This is the right time to increase the cost, and we are thinking very seriously about it. Unfortunately, for the last three months, when we were discussing this COVID thing was there. We are discussing it very seriously, and perhaps we should take some decision soon. To say that when we will take this will be difficult. Understood. Sir, lastly, what is the CapEx outlook for FY 2022? At this point of time, if the receivables is not paid down, would it be fair to assume that the company would effectively look to borrow to basically fund the CapEx and maintain the dividend payouts? I don't think that situation will arise because the receivables are constantly decreasing. If you compare it with December last, means December 2020, at that time, our net receivables was in the range of INR 21,000 crores, INR 22,000 crores. Now it has come down to INR 17,000. If everything goes well, perhaps it will further reduce by INR 4,000 crores, INR 5,000 crores. In April, we really tried very hard to reduce the receivables by controlling and regulating the supplies. Even now we are trying to regulate the supplies to certain big creditors. That is the issue. I think we will be able to generate adequate profit and adequate cash to meet our demands. That I'm quite sure. That is not very common. Thank you very much, sir. Thank you. The next question is from the line of Shikha Raman from Spark Capital. Please go ahead. Hello. Hi. Yeah. Thank you, sir. Sir, what is split of coal sales in FY 2021 sector-wise, power specifically, both from linkage sales and e-auction sales? I don't remember the figures exactly, the sales to power sector is in the range of 75%-80%, maybe roughly 75%. To e-auction, the complete things that have been evacuated is in the range of 11%, rest of the thing has gone to different small sectors. That data, if you want, we can still send you. Okay. Just a minute. e-auction, sorry. Lifting on account of e-auction, although we did auction of 124 million tons, as you know, but about 64 or 65 million tons were lifted. Rest of the thing will get lifted in this year. About out of 560 million tons, about 11%-12% was on e-auction. Am I clear to that extent? No. Can you just repeat this one? It is not clear. From e-auction account, the total lifting was 65 million tons, 65 or 66 million tons. The booking was 124 million tons, but rest of the thing will get lifted this year, along with whatever is booked this year. That is the time given to them to lift the coal. That comes to about 11%-12% of the total lifting. About 75%-80% went to powerhouses. That's two major figures I can give. The rest of the thing was to small consumers, cement or aluminum or something else. Okay. what is the e-auction volumes expected in FY 2022? We are targeting for something like 130 million-140 million ton. Last year, we did 124 million ton. The growth in April and May and June has been quite good. That does not indicate the trend in the whole year, because April, May, June last year were very bad. We are targeting for something more than 130, 135 million ton. 130, 135 million tons. tons. Okay. What is the average premiums of e-auction sales at present, and what is the likely thing for the entire FY 2022? What will be likely thing, it will be very difficult, but then at present, we are getting 16%-17% premium. If our supplies remain good, the premium will be about 20%-25%. It will be very difficult for me to predict anything. Okay. It depends on supply. It depends. If the supply increases, then the premium reduces. How the demand pans out in the coming months, one doesn't know. I was expecting that in June there will be huge demand, but unfortunately, because of the rain, not unfortunately, but because of rain and because of COVID lockdown, et cetera, the demand was not as high as I was expecting. Okay. On the wage hike part, that part that you told earlier, when is the wage hike due and expected? See, the wage review was from 1st of July, and we have created a committee for the wage revision, et cetera. It will take a while before the negotiation gets finalized. Okay. Just, what was the total overburden removal in tons for FY 2021, and how did it compare with FY 2020, and what is expected in FY 2022? The total OB removal, we count it in terms of million cubic meter. The growth was 15.7%. The last year it was about 1,300. 1,347 in FY 2020. 20? 1,347 in 2021, and it was 1,164 in FY 2020. Again, sorry. Okay. 1,347 million cubic meter in FY 2021 and 1,164 in FY 2020. The growth has been about 17%. Okay. For going forward, FY 2022, what is the? If the target is taken into account, this is about 1,338 million cubic meters. If the target is adjusted, it will go down. Okay. When will the price of linkage coal be increased again, and by how much do you expect? That's a very difficult question. I can't say on this how much it will increase and when it will be actually done and how much it will increase. That is not something I can tell you right now. What is the split of manpower percentage between underground mines and open cast? Underground is about 60%, and open cast is about 57%. Okay. What proportion of? Sorry to interrupt sir. Okay. But request you to join the queue for follow-up questions. Yeah, sure. Okay. Yeah. Sure. Thank you. Ladies and gentlemen, please limit your questions to two per participant. Should you have a follow-up question, we'll request you to rejoin the queue. The next question is from the line of Vishal Chandak from DAM Capital. Please go ahead. Mr. Vishal Chandak, your line is unmuted. Please go ahead with your question. The line for the current participant is disconnected, so we move on to the next question. The next question is from the line of Rahul Jain from Systematix. Please go ahead. Yeah. Good evening. Thanks for taking my question. First of all, I want to check on the overburden provision. We are receiving almost INR 63,000 crores, we have hardly any cash to support that. Is there any proposal to reverse that and how much tax liability do we accrue because of that? I couldn't get your question. Please repeat because the- Mr. Jain, there is a disturbance coming from your line, sir. I request you to mute your phone after your question. Please repeat. My question is that we have this OBR provision of INR 63,000 crore, we have hardly any cash to support that provision. Do we anticipate the reversal of that, what is the tax liability we'll accrue if we do that? Secondly, sir, the MMDR Act amendment, what is the increase in cost do we see on some count of premium? For example, for iron ore, the premium is 150% of royalty. Is there a similar proposal on coal? I just want these two questions. Thanks. Okay. I will take the second question first because we have not acquired the land or lease under MMDR Act. We acquire the land under CBA, whatever land we get, gets vested in Coal India. Because of that, there is no lease. The royalty is linked to the price of the coal, that is around 14%, there's no talk or any issue on increasing this royalty or anything. That is something different from how we deal with the iron ore. Coming to your first question, there is around INR 48,000, the provision for overburden. I hope that over the years, maybe not right now but when our mines will start getting depleted, then only this issue will come. We already have more than INR 20,000, more than INR 25,000 in our kitty which is equivalent to cash, over the years, this will again build up. I don't think that will be much of problem on this. Right. Sir, also on our CapEx budget, what sort of number we have planned for this year, and how much money are we going to allocate for our diversification project which we have envisaged, whatever the smelter and solar CHP and things like that? Solar, CHP, et cetera, I don't think there's any expenditure this year on that. I mean, our total expenditure on those all projects will be very less because we are looking for PPA partners. We will not be owning the company completely. Only expenditure we will incur will be in constructing the solar power station of which we have 100 MW allocated in Gujarat. In that, on solar power, et cetera, maybe there will be CapEx if we take 70/30 ratio of that equity. Even if we get another 100 MW from there, 200 MW or 300 MW we get this year. That will be something in the range of INR 1,500 crore, about INR 500 crore. Mostly, my expenditure of INR 1,700 crore will be in three, four things. One is acquiring land. Secondly, R&R thing. Third thing is first mile connectivity to the CHPs and bunkers, et cetera, which we have taken, so that we can evacuate coal easily. The fourth thing will be railway lines and sidings, et cetera. Mainly our expenditure will be related to coal projects only, where we are planning to create capacity to evacuate more coal in an environmental friendly manner. Will we achieve last year's number of INR 10,500 crore or some impact there? No. I told you, last year our expenditure was INR 13,000 crore. This year we are targeted for INR 17,000 crore because all these first mile connectivity projects that we had planned, 35 projects, all were tendered out. Two, they could not sign the agreement because they could not submit their BG. We had to do the re-tender. All these projects, if COVID situation does not aggravate, then they will be in full swing. There will be expenditure in those projects. Okay. That was very helpful. Thank you so much. Thank you. The next question is from the line of Amit Kumar from State Bank of India. Please go ahead. Yeah. Good evening, Agrawal sir. Good evening. Yeah. Sir, can you please tell us what will be the working capital requirement for FY 2022, if possible, subsidiary-wise? We want to ascertain finance cost for FY 2022. We have got loan of around INR 1,000 or INR 1,500 crores in BCCL. Two of the subsidiaries have got adequate cash to meet all the requirements. BCCL also is now in repaying mode. Another four, five months perhaps, if everything goes well, then they will repay their loans. I don't think there is any requirement of working capital to raise loan on this account. In FY 2022, there will be no working capital requirement, incremental working capital requirement. Incremental, again, we will not be taking any loan on this account. Okay. One more question, sir. Actually, two more questions. Sir, you have informed that 75% of coal supply is towards power plants. Does ESG concern of power plants may impact coal demand in ensuing years? Any assessment on it? I won't say that we have done much of assessment. We have got some studies done, the fact remains that coal will remain a dominant energy supplier in coming decades or so. Maybe the role of the coal in terms of percentage will reduce, in overall terms, in water terms, in energy terms, it will increase. I don't foresee much of problem in this. As is happening all over the world, that renewables are snatching some space from conventional power, that will happen in the country as well. Okay, sir. One more question, sir. Sir, we have seen of late that private players are being encouraged in coal mining to improve output. Can it impact CIL in a negative fashion or something? The thing is that whatever mines have been up until now for private sector for commercial mining Yes, sir that at the moment can produce 50 million tons. Secondly, those mines have got adverse strip ratio, et cetera. Thirdly, I believe they will take another three to four years to start production. By that time, Coal India is likely to become more sleek and more efficient. I don't think it is going to affect us much. Rather, it will affect us positively, in a positive manner because of the two things. First thing, we will try to become much more efficient because there will be some element of competition in the market. Second thing, perhaps the price will become more free and Coal India will get some advantage out of that. Okay. Thank you, Mr. Agarwal. Thank you. Yes, sir. Sameer? Hello? Yes, sir. We are continuing. The next question is from the line of Rakesh Arya from SBI Mutual Fund. Please go ahead. Yeah, hi, sir. Good afternoon to everyone. A few questions from my side. First, can you highlight on the underground mine closure as to how much was done, what is the target for 2022 and beyond? If you can also highlight any incremental savings from those that you can accrue. Rakesh, last year we had said that we have identified 23 mines, and which were to be closed in this year. We have already closed down 13 mines, four are more in pipeline, in the sense, out of that 23, 4 are in pipeline. They will get closed because the closing, we cannot do it suddenly. It takes a while because technical thing has to return. Rest of the five or six mines that are left, they have planned to increase the production substantially. Like three or four mines in ECL, they are trying to merge those four mines into two mines and increase the production from current level of less than 100 tons per day to something like 2,000 tons per day. I have given them time till December. If they increase the production, that's okay. Otherwise, they will start closing down, because they are deploying some modern method to increase the production. Those mines in ECL are mines, if they increase the production, then perhaps I have given them option, either you close down or increase the productivity of the mine. They are working on that. Another mine is Rani Atari in SECL, where they are deploying continuous miner and they have awarded the tender. If the continuous miner through the private operator becomes functional, then perhaps we can get in the range of 1,200 to 1,500 metric tons of the coal, that will also become profitable. We have closed down those 13 plus 4 mines. 13 have been closed and 4. To say how much saving has been done, we are working the numbers and exact figures. That calculation says that without getting into detail, about INR 300 crores-INR 400 crores will be saved out of those 13 mines. The exact figure will come in a while. Any target that you can highlight for next one or two years? To give target for more than 1 year will be difficult, but this year again, we are working on that. Right now, we have not pinpointed the mines, but we have identified 17 mines which may be closed. I will not say that. I have consulted my CMD, et cetera, because some consultations and some discussion has to take place, so we have not finalized. Maybe by next meeting, we will finalize that and we'll give you the number. Great, sir. Sir, second question is on the MDO economics. Essentially, you are targeting large mines to be given through MDO. If you can just also highlight what is the kind of differential in cost that could come up because of this transformative agenda that you have taken compared to if you were to do on your own? MDOs, we have awarded two mines. One is Kotre Basantpur-Pachmo, and another is Siarmal. Kotre Basantpur-Pachmo is perhaps 10 million tons, 5 million tons each. Siarmal is 14 million tons mine. The cost that we are getting there is about INR 290, and rehabilitation cost will be on us. The first thing will be the production that will be ensured in a very efficient manner, because if we deploy the labor ourselves, then it becomes very costly. Our labor is very costly. If we work through the outsource model in which contractors deploy the labors and machines, they tend to deploy very small machineries and which do not give good production, and those are not efficient. When the MDO is given for a longer term, we expect that they will deploy big machineries, which will be more efficient, it will be less harmful to the environment. Secondly, there will be continuous supply, and they'll work in much more efficient way. The cost will reduce substantially to us as well. Secondly, in some areas, we are looking at MDO model in which perhaps we are targeting that we will not be providing the service to the land outright. Instead of that, we will give them upfront compensation. That should reduce the cost. The maximum advantage will be by increasing the production in all these big mines, we will be able to close down the small mines which have become highly inefficient, and that will save us lot of money. To calculate what is that will be difficult for me to right now say. Sure. Sir, another question is related to this proposal of merging all kind of e-auctions into a single e-auction window. Any thoughts around that, where do we think this would actually pan out? Well, it will be because I need the permission of the government because this model was decided by the cabinet. We have sent the proposal that all the e-auctions should be merged and there should be only one e-auction mechanism. This helps us in getting two things. First thing is, it improves the transparency. Today, it is at the decision of the officers that this mine is allotted for a particular purpose, that second mine is allotted for a different purpose, and they reduce the quantity for one purpose, they increase the quantity for another purpose. All this leads to lack of opaque type of functioning. That opacity will completely go and transparency will come. When there is some lack of transparency, there are accusations, et cetera, that will also be over. That is from administrative or governance point of view, that is one of the most important things. Secondly, if a consolidated amount quantity is offered for every purpose by mixing all the modes, then we think that the premium will be much higher than what we are getting. That will help us. If you say how much premium will increase, it is very difficult to predict right now. It will definitely improve the efficiency of auction process and it will improve the transparency of the auction process. Got it, sir. One last very quick point. Although your targets initially seems very ambitious, the current run rate does suggest close to 660 million tons of offtake run rate. Is it something that is easily achievable in your view, or you think that more than 10%-12% growth is difficult in current environment? See, if you talk about dispatch, perhaps the 660 seems like achievable this year or maybe it's more than 660. It will depend how the situation in the country is there, because nobody knows when the third wave will hit. If it does not hit, then till March we will be 660. If it hits in December or something, then everything goes topsy-turvy. Last year also I was thinking there will be substantial increase, and we planned for that, we tried everything, but everything was brought to zero because of this thing. If everything goes well, then 660 seems quite achievable. Till now in April, May, June, we have got advantage of about 15 dispatch increase of about 36 million tons. If we continue with this rate, even if we take into account that the same growth will not be there in the coming months. If we assume that at least a slight increase in the coming two, three months will be there. We'll start the third quarter with advantage of about 45, 50 million tons. Achieving a 60 million growth, 60-70 million growth should not be difficult. Got it, sir. Thank you so much. I'll get back in queue, sir. Thank you. The next question is from the line of Vineet Maloo from Birla Sun Life Insurance. Please go ahead. Yeah, thank you. It's Birla Sun Mutual Fund. Vineet, sir. Sir, just wanting to know, one, we made an investment of roughly INR 3,500 crores. What is this regarding? That is question number one. 35 crore in what? 3,500 crore appears as an investment under current asset. That is because in mutual fund, they have invested in some debt mutual fund. This time, one of the subsidiaries has invested. That is the debt mutual fund, nothing, means not in anything else. Okay. I thought you mentioned your CapEx was INR 13,000 crore this year. What I can see in cash flow is only INR 10,800 crore. I thought you were also counting these investments. Our total this is around INR 13,000 crores. We have invested something in HURL and TFL. Whatever loan they take, that does not get reflected in our books. Since that has been raised because of that, we count that in investment for our own purpose. That is there. This rail lines debt, that gets reflected in our books. That must be because of that. Okay. Something with that adjustment because INR 700 crore-INR 800 crore is because of GST adjustment also that we have tried to capitalize this year. Okay, understood. Sir, when you say you will invest INR 17,000 crore in current financial year, out of that, how much again will be by those two entities and how much will be under us, which will get reflected here? Those entity, I think it will be around INR 3,000. About INR 3,000 crores by those two entities. INR 3,000 crores-INR 4,000 crores. Depends on how that progress on those projects goes. HURL is in final stage. It will be about INR 3,000 crores-INR 4,000 crores. Okay. Understood. Sir, just wanted to understand, with this overall CapEx of INR 17,000 crore. I understand that we will get some substantial chunk of receivables back this year, hopefully. We should have sufficient cash flow for CapEx as well as dividend for this year. I'm just concerned this CapEx rate is unsustainable without cutting dividends going forward, unless we either cut dividends or we resort to borrowing. What is your thought on beyond current financial year? How do you see this CapEx strategy evolving? I don't want exact numbers, but a ballpark directional movement should help us. See, the type of growth in CapEx that has happened in last year or that is likely to happen this year, this cannot be sustained. There will not be any requirement either. What we are investing, what we have done in last year or this year is basically replacing all the old machineries which have not been replaced for the last 30, 35 years. Some of this draglines of NCL that got 32 years back, there was no tender. We have done that tender this year. We had not inducted the shovels and the dumpers, which we have finalized this year. They will come this year and next year. Some of the evacuation projects were not taken up seriously that we have done this year, so that in coming years, the evacuation can happen. Now it will depend what is the demand that we face this year and what is the likely demand next year. If the demand increases, our CapEx may increase. If the demand does not increase, then acquiring the land, increasing the machineries or increasing investment on rail lines, et cetera, will get reduced. The second thing that we have done is we have gone for MDO mode. That type of CapEx which we do for acquiring machines, et cetera, or submitting FMC now, those things will be done by MDO operator and it will be on that account. If we successfully do the tendering of eight to nine more mines this year, large mines, then the demand for CapEx will also get reduced in coming years. There are two things. First thing is the CapEx will completely depend on what is the demand that we get in the market. Second, how successful we are in getting the MDO operators on board. Sir, just to clarify, for incremental production, the CapEx that we will require beyond current financial year will be on land and probably evacuation infrastructure. Machinery, et cetera, will be taken care through MDO route. This is our intention as of now. Is that a fair understanding? Yeah, that's right. Acquiring the land will also depend what is the demand. If suppose the demand does not increase that much, then we will not acquire the land. Sure. Thank you so much for your answers. These are my questions. Thank you. Thank you. The next question is from the line of Sonaal Kohli from Bowhead Investment Advisors. Please go ahead. Thank you for this opportunity. I have three quick questions. Firstly, as far as the CapEx, beyond 2022 or 2023, in a normalized environment, would it be fair to say it will be less than INR 10,000 crore? Some broad numbers, if you could give from a two, three-year perspective, for the coal part of the business. Secondly, on the aluminum part of the business, is there a CapEx number you have in mind? FY 2023, it is likely to improve slightly because all the orders that we have placed will get certified in FY 2022, 23 also. Most of our FMC projects and the related sidings and railway lines, et cetera, will get completed. Till FY 2023, I think there will be some increase in CapEx, maybe next year we get a target of INR 17,000 crore, INR 18,000 crore and thereafter INR 20,000 crore. Thereafter, perhaps it will start reducing. Again, if the demand is there and we are able to go for something like 800-900, then the CapEx will have to increase. Sir, if I heard you correctly, even in something like 2024, you are saying the CapEx could be INR 15,000 crore, INR 20,000 crore, or did you mean a much lower number? Some sense on that number. Beyond 2023. FY 2023, I said it will be in the same range, but after FY 2023, FY 2024, it will be very difficult for me to project because it will depend on the demand. If the demand is good, then perhaps this can increase. If the demand is not there, then if the demand continues in the range of 650-700, then there will not be much of CapEx. Sir, when you say not much, would you have any number in mind in that kind of scenario? Whether it be INR 5,000 crores or it is simply INR 10,000 crores? Not INR 17,500 crores. It will be in the range of INR 15,000 crores-INR 17,000 crores. Land will have to be continuously- Hello? Land will have to be continuously acquired and some CapEx will be required for everything because machinery has to be continuously replaced. It will be in the range of INR 15,000 crore-INR 17,000 crore. Mine development funds CapEx are required. Sir, what would be our dividend policy going forward? We gave INR 15.30 dividend this year. Would that be maintained or increased going forward? How would you fund it, with this kind of CapEx? Would you be able to make enough cash flows? The thing is, the type of money we make if our production increases slightly is very high. Had the dispatch been in range of 600 million tons, my profitability would have increased by another INR 3,000 crore or INR 4,000 crore, INR 3,000 crore. That type of money is made. What I am assuming that every year we will be increasing our dispatch by 40 million-50 million tons. If we increase our dispatch by 42 million tons, this will generate enough resources for both dividends as well as CapEx. You're saying even in a normal year, once your base is normal, you're into a normal industry activity, even beyond that for next 2 years, you expect your demand to grow by 40-50 per ton beyond the exception period. Also you expect that kind of increase? I expect that if a normal year is there, this sudden increase will be around 70 million tons-80 million tons. First normal year, thereafter it will definitely increase by 40 million-50 million tons every year. If that type of dispatch is there will be adequate resources for everything, both for investment and dividend. Sir, with this high growth rate. Sir, I would request you to rejoin the que ue for follow-up questions, sir. Thank you. Thank you. The next question is on the line of Nitij Mangal from Jefferies. Please go ahead. Hi, good evening, sir. Thank you for taking my question. First question, can you share what is the latest on contingent liabilities related to mining and taxes, please? Please repeat your question. I couldn't get you. Sir, could you share details on what is the latest on the contingent liabilities related to, there were some mining-related and tax-related issues? There are three types of mainly contingent liability. One is land-related. 1 is land-related, that is specific to Jharkhand State, and that's to, again, mainly to CCL area. We have acquired land, and we have acquired land as per the records of the Jharkhand State Government, and we have paid their compensation to the landowners. There is some discrepancy in Jharkhand land record where it is shown as government land also. Those also have raised some claims. Secondly, there's lot of land in CCL area which we have declared as Coal India's land, but we have not taken possession to that land. For that also, they are asking for money. We are saying that as soon as we get the possession, that payment should be linked to possession. I don't think there is any problem in regard to this because it has been discussed many times last year and to some extent, the solution has been reached. Second thing is related to violation of environmental violations because of which in Jharkhand and in Chhattisgarh, some penalty or fine has been imposed by the state governments in the range of INR 40,000 crore. That too, again, I don't foresee any problem because the stay has been granted and that case is not related to coal. That case under which this has been done was related to iron ore. As I was mentioning, that the way we acquire the land and the way rest of the mining people acquire the land is completely different. This has been challenged and there is a stay, so I don't foresee any problem on that account again. In income tax, there is some liability has been created, which we have disputed in various courts. Against that, some money has been deposited, about INR 12,000, INR 14,000 have been deposited in the income tax department. In many of these cases, we have won at the appeal at the first level and second level. At different levels, those cases are pending. Even if most of the cases go against us, then also that deposit that we have made, I don't say that most of the cases will go against us, because in certain cases, they have disallowed the expenditure on overburden removal completely. Not just overburden adjustment, but overburden removal. That expenditure has been completely disallowed. Nobody can excavate coal unless the overburden is removed. In most of those cases, we have won, and those cases are pending in the High Court, we are likely to win. There is a disparity in the decision given in, suppose, NCL and CCL. All these things are being challenged. Even if we lose all these cases, then it will affect our profitability. It will not affect the cash flow because those INR 14,000 will be adequate to meet all the liabilities. That liability part is taken care of. Land, we are solving. I think most of the problems have been solved. In case of those violation cases or EC cases, again, I'm quite sure that there should not be any liability. Till the time these things are completely out, we cannot delete this contingent liability. Okay. Thank you very much for that elaborate answer. Second question, coming back to the CapEx intensity. Let's say, not one year, but let's say we see the incremental volumes over two, three years, four years period. The amount of CapEx that is going in, and in addition to that, the contractual expenses, both seem to have risen together very sharply. Why are we seeing such a sharp increase in both the CapEx intensity and the contractual expenses? In fact, both at the same time. What's fundamentally changing in the nature of coal production that is resulting in such high intensity of expense? Coming to CapEx, I explained to you we are trying to replace machinery which are old, and we are trying to invest in places where the CapEx is If you see traditionally, last year, the CapEx was INR 6,000 crore. Before that, it was INR 8,000 crore, and three to four years back, it was INR 10,000 crore-INR 12,000 crore. CapEx has been continuously reducing. I would say that there has been under-investment. CapEx has to increase right now because we have to improve our evacuation mechanism. We have to improve our dispatch mechanism. We have to acquire more land. Otherwise, this company cannot grow, nor can we meet the demand of the nation. The second thing that you asked about the contractual expenditure. Contractual expenditure has increased by about INR 2,000 crore-INR 3,000 crore, and that is mainly on account of overburden removal. If you see, last year we have removed more than 17% more overburden and overall excavation, if you see, we have grown by about 13%. That type of increase means about 200 cubic meters increase will definitely increase the contractual requirement. See, the conditions of mines had started deteriorating. Most of the mines had become vertical. In order to ensure the security and the continuous operation, we have to bring those mines to proper geometry. If you see again, the overburden removal over four, five years, it has remained in the range of 1,100 cubic meters, whereas our production has increased from 520, 530 to 600 million tons. All these things had become unsustainable. We have stabilized these things. We have come to the level at which the overburden is slightly more than what is required to be done. We are preparing our mines for the future. At the same time, we have invested in CapEx so that all the old machineries, et cetera, can be replaced, and we can continue our mining operation. Contractual expenditure has increased on account of increasing excavation, and as in CapEx has increased because we want more efficient evacuation process. Okay, thank you very much. Thanks for your time. Thank you. The next question is from the line of Subhadip Mitra from JM Financial. Please go ahead. Hello, am I audible? No, sir. Your voice is breaking, sir. Okay. Is this better? Yes, sir. You may go ahead. Yeah. Thank you. Sir, my question pertains to the non-power linkage auctions. If it is possible to please share what is the quantum of coal that got dispatched through the linkage auctions and the average realization? He's breaking laps, sir. Can you hear? What's the question? Can you repeat it? I couldn't get the question, although it was clear, voice was clear. Quantum of the coal that has been supplied on linkage. Linkage auctions. The non-power linkage auctions that have happened. I think previous linkages which are now getting converted into linkage auctions. Linkage auction we will be doing in coming months, and it will be almost equivalent to whatever is the quantity that is lapsing. If that quantity you have It will be 12. I can't say right now, but I'll tell you the figure. We will ensure that whatever is linkage quantity was earlier there, and what are lapsed over the last one or two years, we will put that much quantity. If it would be possible for you to share those numbers for FY 2021 and FY 2022, even if it is offline, I'm happy. Yes. Thank you. Thank you. The next question is from the line of Ashish Kejriwal from Centrum Broking. Please go ahead. Yeah. Hi, thanks for the opportunity. Three questions. One, on this overburden removal only. Last year, we exposed our miners in order to get more in What we have seen in the last quarter, that overburden removal ratio, that is strip ratio, has come down to around 1.9x. Overall average was around 2.3x. My question is, going forward, that is in FY 2022, will we see something like 2x or 2.3x in strip ratio? See, in the last quarter, unfortunately, there was shortage of explosives all over in all my subsidiaries, especially in NCL and WCL. In WCL, it was a shortage of explosive especially very acute. If you see the removal of the OBR, WCL and NCL contribute the maximum removal because their strip ratio is high. I think that in the coming year, we should be in the range of 2.25-2.3 only. 1.9 is not something which is sustainable. Okay. Secondly, when we are investing around INR 14,000 crore in the First Mile Connectivities, and we are already having three projects with 30 million tons which has been commissioned. Is it possible to share what kind of savings on a per ton basis we are getting out of it, so that we can have at least what kind of interest rate for this INR 14,000 crore? We are investing around INR 3,000 crore-INR 4,000 crore on transportation of the coal from phase 2 sidings or phase 2 loading point. At least that much of money will get saved. Not that much, but most of that money will get saved once these projects are completed. Are you able to share what kind of on a per ton basis we are saving or we can save from all these things that commissioned? On a per ton basis, about INR 50-INR 60 per ton. That is completely based on rough calculation. I can tell you those. I think it should be in the range of INR 40-INR 50 per ton. Okay. Otherwise, whatever projects we have already commissioned, if we can share that savings also, that will be good. Okay. That 30 million tons. Sir, it's not a public question. We'll send it to this number. Okay. Sir, lastly, the kinds of CapEx which we are doing, like for example, this year we have spent around INR 11,000 crore. Is it possible to bifurcate into different buckets, like how much we have spent roughly on land acquisition or machinery or something else? Similar thing for FY 2022, what we are planning for. About INR 3,000 crore should be, I'm giving completely rough figures. I don't have exact figure right now. Rough figure, INR 3,000 should be in the land, INR 3,000 should be in machinery, about INR 1,000 crore should be for SMP projects, INR 700-800 for FMC projects. I'll send you the details, and then mine development, et cetera, we must invest something like INR 1,500 crore. Major heads are basically land and machine procurement. Okay. That's only you are saying that by FY 2024, if demand does not increase that much, we can save on that land acquisition cost. Otherwise, every other cost will continue to increase. Even if demand does not increase, but if we continue with 700 million type of production after 2023, 2024 also, 700, 750, then also land will have to be acquired. I won't say that land will not have to be acquired, but expenditure on HEMM, expenditure on this first mile connectivity, et cetera, will get reduced. Okay. Sir, lastly, I know wage negotiation that will be starting from. From when we can start making provisions for same, whether it be second quarter onwards or from first quarter onwards only we will make provisions. Secondly, in case if we have to increase coal prices under SCC, that can be done only after final wage negotiations, or that can be done earlier also, depending on demand profile? That is not linked to wage negotiation. We will try to do it because wage negotiation will take quite some time. We'll try to decide on this fast. Any provision from wages? From second quarter onwards, we'll start making provision. Okay. Fair enough. Thanks a lot for this. Thank you. The next question is from the line of Kamlesh Bagmar from Prabhudas Lilladher. Please go ahead. Yeah. Thanks for the opportunity, sir. One question on the part of options. Sir, I'm not going to the, like say, options for power and non-power and all that. Even if you see like a spot option. We are getting premiums of hardly around 29-odd percent, while the way the global prices are and the petcoke prices are. Like I said, the decrement has not been that significant. Even if you see the amount of quantity which we have auctioned, it has been hardly around 4 million-5 million tons in an environment when the prices are on such a high level. What's the issue there? Why the customers are not participating in that, even in the special spot auction? We have, let's say, sold hardly around 3 million-4 million tons in the last 4-5 months. Even if you see the special spot for coal importers, right from October 2020, we have auctioned hardly around, let's say, we have been able to allocate around 7 million tons in that. On that front, I really want to know what's the issue on the part when the international coal prices are at a high of 10 years and we are not able to sell the volumes in the auction market. Again, we are trying to say that now we will allow the buyers or the participants to sell into the export market. On other hand, we are not able to get self-sufficient on the domestic demand as such. First thing, let's just correct the figures. Maybe I've understood wrong. Last year we did auction of over 124 million tons, not 4 million-5 million tons. I don't know where did you get that figure from? No, sir, I am talking about last three to four months. Last three months, we have done something like 20. How much did we do? Booking is 26 million tons. The booking is now 26 million tons in the last 2 and a half months. I was referring only to the spot auctions and the special spot e-auctions. I do understand that in the special power for power, there are constraints and the sector is under the problem. I do appreciate that their realization would be low. I was referring only to the spot e-auction and the special e-auction and the last year's special spot for coal importers. I don't have right now the figure of spot auction and e-spot auction. One has to understand that if the last year we did 124 million tons. In April to May, spot auction is about 3 million tons and special spot is 4.5 million tons, because you're right, about 4 million tons was done in April and May. The premium that we have got on this, spot we have got 32%, special spot we have got 7%. We should not see special spot and spot separately because both of them are almost same except for the fact that in special spot we have what. You have to see that in the last few months, in January, February, March, how much auctions we did on this account. We did last year 124 million tons, out of which most of the thing happened in last six months. Those people are still to lift the coal. Secondly, during all this two, three months, the demand got subdued because of COVID, et cetera. In such circumstances, again, the rainy seasons were ahead. We know that in rainy season, the consumption of the coal gets reduced. People didn't bid for it. We have offered lot quantity. If there is no demand in the market, perhaps we cannot do much about this. Whatever the coal import is taking place, one has to do the analysis why the coal import is taking place. A part of this, the maximum part is out of 200 million tons, if anyone sees, 10, 15 million tons is because of the steel industry coking coal, which we cannot replace. 25 to 23 million tons is on account of the power plants located on the ports. There's hardly much of the coal which needs to be replaced from. We understand that the quality of the coal is not very good in the country, and hence, we cannot replace that type of the coal. We can replace only the coal which is of the same quality as the Indian coal. In this context, the thermal power coal that was required by the country last year, almost whatever was substitutable, we could substitute. We calculated that about 80 to 90 million tons coal has been substituted. This year again, had there been the normal circumstances, perhaps our auction would have been much more. See, the price of the coal means the premium that we get in the coal also indicates the demand. If the demand would have been there, perhaps the premium would have been much higher. Sir, question on this CapEx on the evacuation. In the presentation, we have highlighted that around INR 27,000 crore investment would be made on the evacuation projects. Would it be entirely by us only or there would be participation by the railways as well? How much would be shared by the railway? Because even if you see the past, entire of the investments on the railways used to be done by the railway, Indian Railways. Is it going to be spent entirely by us or on our account? See, the evacuation that we have shown is only our infrastructure. About INR 10,000-12,000 crores will be spent on CHP. These are our infrastructure, CIL's infrastructure. You cannot expect railways to spend on that. Then there are about 24 and 21, 45 lines which are 21 is siding and 24 are lines providing connectivity to our siding. We will have to spend on that. I don't know whether INR 24,000 or whatever, but in that range, INR 20,000-22,000 will have to be spent by us. It is not railway's project. It is a project for the evacuation of the coal and it's specifically on the Coal India's property. In that sense, this means that CapEx intensity is going to remain very high for Coal India in coming next three, four years. At least for two years it is going to remain in this range, INR 16 billion, INR 17 billion, INR 18 billion. Okay. Thank you, sir. Thank you. The next question is from the line of Kirtan Mehta from Bank of Baroda Capital. Please go ahead. Mr. Kirtan Mehta, your line is unmuted, sir. Sir, there's a disturbance coming from the line of Mr. Kirtan Mehta. The next question is from the line of Rahul Jain from Systematix. Please go ahead. Yeah, thanks for taking my question, sir. Sir, if my question earlier on the MMDR Act. Sir, it is very clearly specified that PSUs will have to pay around 200% of royalty. I would invite you to the schedule fix of the even t. Just, I was saying that it's not applicable. I'm just confused over here. Please tell me about it. I don't think MMDR Act is applicable much, except for certain things. We are not on the lease land. We are not operating our mine on lease land. We are already paying very high royalty, which is about 14% and plus some extra, in all we are paying more than 18% of our selling price as royalty. On that royalty, I think 18% as GST, plus we are paying INR 400 as a GST compensation tax. I don't think there is any further talk about imposing more royalty on Coal India or Coal perspective. I mean, see, this is probably all about here, let's say, NMDC both are now paying the premium because of this compensatory measure for private entities which have paid high premiums for the mine acquisition. I'm just wondering how it is different for Coal India. We are completely operating in completely different. If you want, we can have offline discussion on this particular topic. Sure. Secondly, sir, under your assessment, when is it that India's coal demand is likely to peak? One of your customers are expanding capacity. Hardly some 60 odd of capacity was added last year, and there is a very small pipeline for some more capacity addition for next two or three years. In that environment, you're doing such high CapEx. What is your blue sky assumption, say, three, five years down the line of where our coal demand is going to peak? I think it will peak somewhere near 2030, not before that. See, already our plants are operating at very low PLF. Even if that PLF is about less than 60%, even if they increase by 10%-20%, which quite is reasonable, then the coal demand will increase tremendously. That's likely. If the country has to grow, it needs power, and whatever power we are talking about cannot come through solar energy and so forth. Right. Do you have a plan to enter into power generation sometime in future? Not in a big way or anything significantly. We are looking at solar power only, not beyond that. Right. Thank you so much. Thank you. The next question is from the line of Vineet Maloo from Birla Sun Life Mutual Fund. Please go ahead. Yeah, thank you. Sir, just a quick follow-up question on the CapEx part. You said there's bulk of it on machinery, which is for replacement of existing stock, which is very old and depreciated. Sir, how long will this portion of the CapEx will continue? How long will it take for you to modernize your fleet of machinery? We have ordered almost everything that was required. I mean, not small thing, but almost all the big machineries that were required almost that have been ordered, like 240. Only thing that is left is 42 cubic meter shovel. Otherwise, draglines, 20 cubic meter shovels, dumpers, et cetera, has been placed. This will come in next one and a half year or two years. Dragline will take a long time because they have got quite a long lead time, perhaps draglines will come in next four, five years. Rest of the machinery will come in two years. Thereafter, perhaps this investment should cease. Okay. Understood. Thank you so much, sir. Thank you. The next question is from the line of Sonaal Kohli from Bowhead Investment Advisors. Please go ahead. Thank you for the opportunity again, sir. I have two questions. On the ESG side, have you taken any significant initiative? Is there any possibility of electrification of the coal plants? How is the technology there? Over the next five years, do you see any possibility of that or what could be the roadblocks? Any technological changes that happen which could help us on that side within a timeframe of five years? That's my first question. Yes, we tried. You can see the presentation also. Last year, we did more than 800 hectares of land. We planted more than 20 million trees. This year, we have increased our target to 1,300 hectares. We think there will be substantially more improvement. We are investing in FMC because of ESG also, because it will reduce the environmental load. We have seen that the transportation of the coal caused much more pollution than the production of the coal. Instead of using explosives for accepting coal, we are going in a big way for surface miners. In all new contracts, we are providing that the contractors will use surface miners. We are using whatever water discharge that is taking place from mines, we are using almost everything for dump stabilization, et cetera. All those things, whatever is possible, we are doing. We are getting our mines graded from external agencies, so that certain improvements can be made. We are working on that. For the first time in Coal India, we have brought out the ESG report prepared by some third-party agency. Next year again, we will be preparing that. All those possible things on ESG we are doing. In COVID situation, we have tried to help the society in the big way. Actually, there is no other corporate entity in the country which would have established hospitals amounting to total beds of about 4,000 beds. In the area of our operations, after the state government, we were the biggest provider of the healthcare during COVID situation, and we have upgraded our hospitals. We are creating the oxygen plants in about 27 hospitals so that if something similar to COVID happens again in future, there will be no shortage of oxygen in those areas. All these things we are doing. For gasification, we have put Dankuni on tender. We have received one offer as well. We are doing the analysis, but everything will depend on viability. Unless there is a clear-cut viability and there is a commitment from agencies for offtake of the product that we take, it will be difficult for us to proceed in that line. Sir, as far as your solar CapEx is concerned, do you expect it to become material after your CapEx in next two years, which is quite large, is over? Is that preventing you from investing heavily in solar? Will those plans change between 2024 or 2025? Secondly, the technology which you have very high CapEx in next two years. What I wanted to know was, because of that, is it that you are missing this in solar? Would that eventually change beyond 2023, let's say, 2024, 2025, you are spending much more on solar projects. Secondly, the kind of machinery you are employing, which is new, once this new machinery is over, let's say, we land up into 2024, could we expect some type of EBITDA per ton increase because of these initiatives once all of this is complete? What could be that quantum? Just trying to evaluate any advantage, either on manpower reduction or profit increase because of this new machinery. Manpower is decreasing very rapidly. About 13,000-14,000 manpower net reduction is there. We have decided that we will not take up projects in those areas where the manpower engagement is very high. Like in areas where we have to take land outlays in larger numbers, we have stopped taking those mines, and now we are concentrating on the brownfield expansions. Manpower is going to reduce continuously, and perhaps in coming years, the manpower will reduce at a still rapid rate. That is one thing. The cost is going to reduce. The machinery investments are likely to go down. You are right. Whatever investment we are making in solar projects, et cetera, will likely give good results. EBITDA will definitely improve from next year onwards. There is no doubt about that. It depends mostly on our offtake. If there is a normal year and offtake improves, even in this bad year, we had an EBITDA of 25%. Last year, it was 28%. It has reduced only slightly between so much of everything. EBITDA is likely to increase further. If we go to 650 or something like that this year, there will be a tremendous increase in profitability and EBITDA. That is not something which will get affected by whatever investment we are making or whatever machinery investment, et cetera, we are doing. Those impacts will be very small. Sir, my question was actually on the contrary, the opposite of perhaps what may have come out of it. What I was trying to understand, because of the machinery you are spending, suddenly the only emphasis of constant, what would be the EBITDA per ton increase because of reduction in manpower cost or increase in productivity? Any sort of emphasis that you could make EBITDA per ton next year? Your voice is not clear. Somehow I'm not getting it. Ask the moderator for it. Can the moderator repeat the question? His voice is getting slightly bad. Hello? Let me try it again. Can you hear me? Yeah, your voice is coming, but it's not clear. Clarity is not there. Is it better now? No. I'll send you an email. No worries. Thank you. I'll reply you all separately because in those circumstances, there's nothing. You can mail me, sir. Okay, next. Thank you. The next question is from the line of Vishal Chandak from DAM Capital. Please go ahead. Yeah. Thank you very much, sir. The line got disconnected in the previous occasion. My question was, we had in the past been talking about the vision of achieving 1 billion tons of production by FY 2025, then we accelerated it to FY 2024. Now, you are talking about 700 million tons probably could be a more aggressive target for next year. When are we at all, are we planning to hit about a billion tons in production and dispatch, or this is something that would be kind of thing of past? See, coal production depends on what is the demand of the economy. We cannot keep on producing the coal and storing that. The last year, we produced about 596 million tons, and still our stock increased to 99 million tons, or it started touching almost 100 million tons, which is the ultimate capacity we can store the coal at our end. This year, again, we have kept a target of 740 million tons of dispatch. As the things are happening, I think in coming months, perhaps we'll have to recalibrate our targets. I think that by FY 2022, the economy will be at the same level as it was at FY 2020. These two years have been lost. If we think that the country will develop in the same way as it was expected, then perhaps FY 2024 will become FY 2026. We are keeping those targets perhaps at a slightly lower level. To say that someday or other things will be achieved is slightly difficult. Nobody expected COVID to happen. Nobody expected that almost the second phase will be so severe. Nobody knows that third wave will come or not. In that circumstances, keeping the target constant is not something right to do. No, I completely agree, sir. My question was largely with respect to where do you see the pockets of revival in coal demand so that we can hit 1 billion tons? It is always the demand which is the constraint, not the production capacity now. First thing is the demand of energy is likely to increase if it is a normal year. We are operating our thermal power stations at 60%, something like less than 60% PLF. These are likely to increase if the country has to develop. In NRS sector again, we can replace some coal which is being imported. Last year was a difficult year. Everything, where the productions were extra low and demand was low. This year, again, the likely demand scenario is going to be subdued. In coming years, definitely the NRS will improve. Despite huge pressure on us during April, we kept on supplying coal to NRS sector. This is for the first time that we did maintain the ratio for NRS with increased power demand also. I think that slowly we'll win the confidence of NRS sector, and we'll be able to meet their demand. That way, I think our coal demand should increase. If the country has to develop, coal is going to remain the main source of energy in coming 10 years. Correct. Sir, my second question was with respect to your CapEx. We have been talking about replacing three-decade-year-old machinery, and probably by next year sometime we will replace everything, which is possible. As you mentioned, we'll spend about roughly close to INR 45,000 crores in this entire phase over the next three-year timeframe. Will that be good enough to take us to a billion tonnes capacity or again, to reach that billion tonne production, we would again have another INR 50,000 crores for the next round of CapEx for that? See, there are two things. INR 45,000 crore is not for machineries and FMC only. This includes land development, this includes rehabilitation of the people. It includes many more things. First thing is there that requirement for perhaps rail connectivity, requirement for these machineries will get subdued because 2-3 things are happening. First thing is constructions will happen, so to that extent the requirement will get reduced. Second thing, we are moving to MDO mode. On all those new projects, etcetera, the funds will be invested by the mine operator. Third thing, in most of the mines, slowly our own production is getting reduced and production is increasing through outsourced mode. There the machinery requirement is getting replaced. At the same time, if we have to maintain some consistency in our production and constant increase in production, at least 20%-25% of our total production should happen in-house. Otherwise, because of the failure of the contract, because of other things, the production will not be constant. To that extent, we are maintaining our in-house capacity and rest of the thing is getting outsourced. After this investment, perhaps the investment on these three things will get reduced, but investment on land will be there and that will be a substantial investment. Not in the range of INR 10,000, INR 20,000, but INR 3,000, INR 4,000, INR 5,000 crore of land will be required. Along with other things that we have to increase the production, then some investment will have to be made. Great. Sir, my next question was with respect to your diversification from coal. You mentioned coal to gas is one project, then fertilizers another, solar power is another. If you could just give a brief update on where are we on all these projects. Coal to fertilizer is one project of TFL. It was started about two, three years back. The construction got hampered because of COVID. It should have reached to 30% level. This is now in terms of, I don't remember exactly, but it must be in the range of 10%-15%. This government has given guarantee of 12% IRR on this project. Our investment is not much because the total project is about INR 8,000-INR 9,000 crore. Our total investment is likely to be around INR 800-900 crore only. The second project we are talking about is gasification. We are looking for partner. We are looking for somebody who can offtake over all our products. These things are not materialized. Saying anything beyond this will be difficult. When will it come? When what will happen? Unless the viability is there, unless the assured offtake is there, we are not going to invest on this. The third thing is solar power. Solar power, we are targeting for about 2,000-3,000 gigawatt investment in the coming years. We have got one project on which we have to work, and we are likely to complete it in this year, and then coming years, we will take some project. Solar power is one area where we think that it will give economic sustainability to the company for coming 2-3 decades. That is one area in which we need to invest. Rest of the things, smelter or these things, that will depend on whether we can get some partner who can. We are looking for a model in which we'll provide all the clearances, whatever subsidy the government is going to extend, that we will take on board, and thereafter we'll tender it for some private person to invest. We hope that maximum expenditure or maximum capital investment will be done by those people. In those sectors, there is a risk of technology, and which Coal India perhaps it will be difficult for Coal India to take. Sure. Sir, my next question was with respect to your. Sorry to interrupt Mr. Chandak sir. We have a participant waiting for the tone. Thank you. Okay. Sure. Hello. Please continue? The next question is from the line of Ashwani Kumar, an individual investor. Please go ahead. Good evening, sir. I had a question. If I look at your production data for monthly production data on slide 11 of the presentation, we see that in March you are able to produce 70 million tons, sometimes 75 million tons, sometimes 80 million tons, and maybe you have gone up to 82 million-83 million tons. Now, in the previous months, either there are 28 days or 29 days, depending upon the leap year or not being there. If you are able to produce 80 million tons in the month of March, what basically prevents the company in terms of either man, machine, or the process, or within MDO or with the company mines, company's own production, why you are not able to scale up it in the months of January, February, and March? One can understand the first half, July, August, September is a period where there is monsoon, et cetera, or maybe the demand is low. Certainly, in the normal years, demand in Indian economy in the second half is slightly higher and gets more higher in March many a times. If you are able to do 80 million tons in March, why you are not able to produce 80 million tons in the month of February or in the month of January? There is effect of last mile. In the last 100-meter one was very fast. We put all our equipment, all our resources in production of coal. If you will see that, to that extent, OB removal gets suffered. Basically, in the last one month, the type of resources mobilization which we do, type of efforts which we make, is something unsustainable. We remove the machines from OB and start producing coal because in January, February, March, we have to produce more because in spring month, April, May, June, the demand is always very huge. Sending that type of production becomes very difficult. Whatever is there that we do in March is something difficult to sustain. I found that it is completely unsustainable. In April, May also, the type of production we do, if we do that throughout the year, perhaps there will be no demand for the coal. No, my point is, sir, in whatever conversation I'm hearing for the last one and a half hour, basically, your estimate, as even Vishal pointed out, that 1 billion tons was the earlier target, and you said these are two COVID years, FY 2021 and FY 2022, 1 part of it, 1 first quarter of it. If you really think about the industrial production moving up and again, the demand for power, the $5 trillion economy cannot happen without power demand going up, and that too thermal PLF improving. If we take the normal situation here, the demand for coal has to be strong. I agree that you can do 80 in March, but let's say lesser in previous months. If the demand were to rise, let's say by 10%-12% in terms of power demand, thermal power demand for coal would rise on a normalized basis. Would you make any attempt to increase production of coal? You have cash, you have man, you have machines, you have put the CapEx, the higher size machines. What is the plan to really improve the monthly output in months other than March? Is there any specific attempt by the company to improve the production other than the month of March? Let's say, if the demand rise, would you be in a position to supply more, or would India will have to import again more? That is my question, sir. I'm quite sure that if the demand rises, then we will be able to meet the demand very easily. First thing, actually, in this month of February and March, I stopped talking about production to my officers because it was quite evident that we will end up with 100 million tons of stock. I was emphasizing only about the dispatch. Back in April, the dispatch was improving, but again, in May, the demand started switching off. There was a demand. I won't say the demand was not there. If the demand is there, producing coal is easier than evacuating coal. That's why we are in evacuation. Evacuation, if these FMC projects get materialized in 2023, we are targeting for 2023-2024. March or April 2023, at least most of them will get completed. After, the evacuation will not be a problem. Everything we have started monitoring the contracts. This time we used to think that our contracts should be of the same level as the demand is. Now we are seeing that the contracts should be at least 1.3x the likely demand is because hardly any situation in the country that the contractors perform up to 100%. There are very few contractors who give 100% performance. We have increased our contractual capacity also tremendously. There are three types of contractual capacity. One is removal of OB and coal, and two is transportation and crushing. At all these points, we have increased our capacity in all subsidiaries and almost all mines by 1.3 x. With this, I am quite prepared to increase the production whenever the demand is. Sure. Thank you, and wish you the very best. Thank you very much. Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Mr. Rahul Mody from ICICI Securities for closing comments. Thank you, Mr. Agarwal, and thank you, Mr. Soni. Thank you, Mr. Tiwari, for your time and again, a very detailed presentation and a very detailed call. You've given more than one and a half hours of your precious time. We'd really like to thank you for all the efforts made, sir. Thank you, Rahul, for arranging this con call. I understand there were a few questions which have remained there, means people could not get the chance to. If they send their question to Mr. Vishwanathan, we will send them a reply on email. If they feel that there are certain questions, when factual question, there were one or two questions on which the data could not be given. If they send those questions, we'll definitely send them through email. Thank you very much for arranging this con call. Thank you, Rahul. Thank you. Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.