Date | March 29, 2017:

The projected liberalisation of the coal sector to private commercial miners later this year has opened new scope for Coal India, of late on a diversification mode.

The government-owned entity has been engaging its subsidiary, Central Mine Planning and Design Institute (CMPDI) to execute services in exploration, mine planning & design and other mining needs. It now feels the latter can also play the role of a key mining consultant for state and private companies in a liberalised regime.

As a result, it is preparing its consultancy arm to expand its horizon, not only in private coal mining but to venture into other mineral mining services as well. CMPDI often engages with the petroleum ministry as well and has been getting consultancy orders from private companies.

"Lately, there has been a three-fold increase in our revenue from private companies. With the (coal) mining sector opening up, Coal India, via CMPDI, can play its role as a key mining consultant," a senior CMPDI official told this newspaper.

Senior Coal India officials confirmed that talks were on to diversify CMPDI's consulting portfolio. This would mean opening of the mining consultancy front of Coal India to private entities. The consulting arm is also considering a restructuring of its organisational profile.

"The question is how we position ourselves to private companies. We have core competency in the technical aspects of mining," added the official quoted earlier. It has so far been focusing on coal, petroleum and gas mining consultancies; it is now keen to cover all fields of mining. "The idea is to turn the consultancy wing into a holistic mining consultant," a second official from CMPDI told this newspaper.

A Coal India official said some companies which used to be CMPDI clients had started their own consultancy and planning division. And, were now providing consulting services to other companies. "Naturally, we are in competition with them and thus need to have an edge," the official told this daily. They are taking advice on how to go about this.

While formulating this road map, the official said there was a need to study the future market scenario in the coal sector, beside opportunities for CMPDI to get into other areas. It is specifically on the lookout for diversification into exploration, mining and allied engineering sectors apart from coal. And, development of alternative sources to coal-based energy.

The process to major in consultancy services was signalled quite a while earlier, when CMPDI's chairman and managing director, Shekhar Saran, was quoted in the 2015-16 annual report as saying, "The pricing mechanism of the company is being studied with the help of ICWA, and possible strategies for enhancing the quantum of outside jobs (non-Coal India) in value terms, including enhancing the sales through diversification in areas of mining and allied engineering sectors other than coal, development of alternative sources of coal-based energy, etc."

In recent diversification bids, Coal India will be floating a bid for a coal-to-liquid project via a subsidiary, Central Coalfields, which can produce petroleum oil. It is also floating a joint venture with NTPC to revive two sick units of Fertilizer Corporation of India, which will entail Rs 18,000 crore of investment in the next four years.

(Source: http://smartinvestor.business-standard.com/)