Monnet Ispat & Energy plans a 3,000 MW power generation capacity in the next five years by leveraging its Indian and Indonesian coal blocks. Besides, the company is in talks with Chinese and Italian firms for design and technical collaboration to foray into pre fabricated steel business. Mr Sandeep Jajodia executive vice chairman and managing director talks to ET's Sarita Singh on plans for power, steel and coal mining sectors.
Q - What are your plans for the power business given the fuel and finance constraints the sector is faced with?
A - We target to scale up our power generation capacity to 3,000 MW by 2017. We are looking for coastal sites in Andhra Pradesh and Gujarat to set up projects that can be fuelled by our Indonesian coalmine. Presently we are implementing a 1,050 MW thermal power plant at Angul in Orissa at an investment of INR 9,000 crore. The project is fueled by specifically allocated coalmines and would be one of the low-cost generating stations in the world since there are no transportation costs involved.
Funds are in place and contracts have been signed for sale of entire power at an average tariff of INR 2.80 per unit. The project is targeted to be commissioned by June 2013. Another 660 MW expansion project is planned at the same site and is expected to be commissioned by December 2014. We are confident that will not face any problem if funds are needed, as banks are keen to lend given the strong credentials of the company and the project.
Q - When is your Indonesian coal mine likely to begin production and do you plan to sell coal in India?
A - Our Indonesian coalmine is set to start production by June 2013. We plan to trade excess coal after consumption in 1,200 MW-1,300 MW planned power plants. As the mine is located in Sumatra , the logistic costs would be less for transporting coal to India. It is a safe and secured asset spread over 25,000 hectares land of which only 1,500 hectares has been explored with established 65 million tonnes reserves. We expect these reserves to go up substantially after complete exploration of the total area.
Q - The company has bagged contracts from Coal India for setting up coal washeries. Do you plan to expand further into washeries business?
A - We plan to foray into service sector by setting up coal washeries with 50 million tonnes capacity by 2014. It is a sustainable business with minimal capex requirement. We have bagged contracts from Coal India for setting up two washeries of 5 million tonnes and 10 million tonnes on build, operate and maintain basis. We are also setting up a 4.2 million washery for Punjab State Electricity Board and another 9 million tonnes captive coal washeries at Angul and Raigarh.
Q - What are the Monnet's other diversification plans?
A - We will produce high value steel to cater to demand from marine application, offshore oil and gas exploration and defence sectors. We are in advanced talks with Chinese and Italian firms for designing and technical collaboration. The group plans to set up first prefabrication shop in Raipur with a capacity of 60,000 tonnes a year. The capacity is planned to be scaled up to 3,00,000 tonnes per year at an investment of Rs 400 crore. We are exploring sites at Delhi, Gujarat, Orissa or West Bengal to set up these units.
Q - Any update on your integrated steel plant at Raigarh in Chhattisgarh?
A - The 1.5 million tonnes per annum steel plant is expected to begin operations from April next year and will reach full production by September. We will produce very cost competitive product mix including plates, structural steel, rebars at the plant.
Q - Your reaction to recent media reports on investigations against the company for excess production of coal from your blocks.
A - I was very saddened to read the recent media reports. I would like to say here that we are a company with huge integrity and credibility. I understand that there was some unsubstantiated and frivolous allegation made against our company. However, I would like to clarify that there is no investigation going with any government authority on this issue and Monnet is under no scanner as has been reported.
We are very proud that we operate the singlelargest underground coal mine in the country with productivity levels close to 2.5 times of the country's average. The coal that we mine is 100% utilised captively by us and as in the last two years we have added more capacity in sponge iron making, we still need to buy coal to meet our requirements regularly from the e-auctions held by Coal India. In other words, our own coal production doesn't take care of our needs completely and therefore there is no question of selling coal in the open market. I would also like to say that we are doing such a good job with our mine for which we should be hugely applauded rather criticised.
Source – Economic Times
