Source - ET Now

In an interview with ET Now, Mr BL Bagra CMD of NALCO gives his views on the company's performance in 2012 amidst the shortage of coal supply.

ET Now - In September and October, the company had shut down 120 ports out of the 931 that you have owing to severe lack of coal availability. What's the current status?

Mr BL Bagra - The coal supply situation has improved a lot after mid October. In September owing to a lot of disturbances, we had to shut down 120 ports. As the coal supplies have improved, for the last two months we are receiving coal as per the linkage agreement.

But we have not yet started reopening the ports shut down in September as we are building up some stocks. We were left with only two days of consumption stock in September. Now full requirement is being met which we are using for increasing the stocks. Once a stock of 15 to 20 days consumption is reached, we will consider reopening the ports shutdown in September.

ET Now - Do you see further deterioration in margins? The domestic coal supply will continue to be tight, rupee is weak of course and raw materials continue to be high. Is there a cost pressure that you are kind of working to defend?

Mr BL Bagra - Our cost of production is under pressure from various factors. In Q3, due to improved supply from Coal India, there is no pressure on the coal front. Other raw material like fuel oil, furnace oil, which are directly linked to the oil index & the rupee dollar exchange rate, have led to some pressures on the oil & carbon fronts. The cost of production is going up. The improved situation of coal supply will help us. Q3 cost of production will not be more than Q2.

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