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Gujarat Mineral Development Corporation (GMDC) held a conference call on Oct 16, 2012. In the conference call the company was represented by A L Thakor, GM (Lignite), Pawan Bhootra, GM (Accounts) and D Chattopadhyay, GM (Power).
Key takeaways of the conference call
| Output |
|
Q2FY13 |
Q2FY12 |
Var (%) |
| Lignite Volume@ |
19.6 |
16.34 |
20 |
| Bauxite Volume@ |
4 |
1.75 |
129 |
| Thermal Power^ |
267 |
240 |
11 |
| Wind Power^ |
86 |
37.52 |
129 |
| Solar Power^ |
1.5 |
0 |
|
@ Figures in lakh tones
^ Figures in million units |
Power business sales for Q2FY13 stood at Rs 92 crore (compared to Rs 49 crore in the corresponding previous period) with Rs 60 crore from thermal power, Rs 30 crore from wind power and Rs 2 crore from solar power.
SEBs accepted the lignite price hike from Rs 500/tone to Rs 635/tone effective April 1, 2011. Since they disputed and paid only at the rate of Rs 500/tone until Q2FY13, the difference has been collected and accounted by the company in Q2FY13. The company has collected arrears of Rs 22 crore pertaining to FY2011-12. And similarly an arrear of Rs 10 crore pertaining to 2011-12 has been collected by power business of the company as fuel cost is a pass through item under PPA with SEBs. Overall the aggregate impact of lignite price hike (to Rs 635/tone) in the last 18 months upto Sep 2012 including arrears of 2011-12 was Rs 32 crore for mining division and Rs 14 crore for power business.
Spike in other income is largely on account of write-back of excess provision made towards mine closure. Subsequent to clarification from Ministry of Coal, the company has writen-back the excess provision to the extent of Rs 27 crore made in 2011-12.
Operation & maintenance of power plant – the company has given the LoI to Kepco of Korea and they will take over the power plant by Dec 2012. For the first month the plant will be run jointly and they gradually takeover the O&M of the power plant from Jan 2013. The payment mechanism is as such that they will get their quoted price if the PLF is 75% and above. If PLF higher than 75% they will get an incentive and if it is below 75% the payment is proportionately lower. For the initial 6 months there won't any penalty.
In relation to Panandhro mines, there is an under-recovery of mine closure charges of Rs 34 crore which will be recovered in next 2 years.
Current lignite mining capacity stands at 13 million tones (Panandhro 3.6 mln ton, Rapardi 1 mln ton, Mata-No-Madh 3.6 mln ton, Bhatia 2.5 mln ton and Bhavnagar 3 mln ton) and the company expects the capacity will increase by 4.2 million ton next year. The incremental capacity is largely to come in Mata-No-Madh, Bhavnagar and Bhatia with no major capex as all infrastructure is already in place at this mines.
Expects 20% growth in lignite volume in FY14
The cost of mining has gone up by 6% on account of diesel price hike.
The company will complete the wind capacity expansion by Nov 2012. Next fiscal the plan is for addition of another 50 MW.
The company intends to supply the renewable power to the JV companies i.e. the cement company once that is set up, rather than to grid. This is expected to result in higher realization.
The company to spend Rs 250 crore on augmenting land inventory of which about Rs 50 crore is for mining and about Rs 200 crore for alumina refinery.
Softening of international coal prices is not to have impact on lignite sales of the company as it serves to small to medium players and their boilers are designed to run on domestic lignite.
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