Singareni mulls price hike, to incur Rs 6,000 cr capex

Hyderabad, Dec 31 (UNI) State-owned Singareni Collieries Company Limited (SCCL) is mulling on effecting an eight per cent increase in coal prices even as it will be implementing a Rs 6,000 crore capital expenditure plan to produce 50 million tonne in the XI Plan, a top executive today said.

In an apparent attempt to absorb the higher cost, SCCL, which had revised coal prices in September 2004, was in talks with stakeholders -- Andhra Pradesh Government and Centre -- for a price revision.

Coal India, the public sector behemoth, had over the last seven years increased prices by about 22 per cent.

SCCL had a ''strong'' case for revision of ''different rates for different grades of coal,'' Company Chairman and Managing Director S Narasinga Rao told media here.

''A decision for around eight per cent increase (in prices) is likely soon as SCCL is taking a very critical look,'' he added.

The company is waiting for a detailed project report sometime in April 2008 for putting up a 500 MW merchant power plant at Jaipur Mandal of Adilabad District at a cost of Rs 2,400 crore.

The plant, likely to be commissioned mid-2011, will meet SCCL's own demand of 120-150 MW and allow it to trade the surplus power.

Backing up its programme to open 27 new mines, including seven underground, at an investment of 3,400-crore to produce 50 million tonne in the XI Plan, the company also plans to acquire two SMS explosive units from the private sector IBP at Godavarikhani and Manuguru having a total capacity of 15,000 tonne per annum, to insulate itself from market volatility, against its demand for 30,000-35,000 tonne.

By December 31 this year, SCCL had produced 29.83 million tonne, a 14.3 per cent increase over the first nine months of last fiscal.

It is targeting nearly Rs 300-Rs 400 crore profit by March 2008, after notching Rs 94.86 crore provisional net profit from Rs 3,079 crore sales in the three quarters of FY2007-2008.

UNI