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Coal India Ltd
Earnings Call Analysis
Q2-2024 Analysis
Coal India Ltd
Coal India, the state-owned coal mining corporate, had a performance discussion after announcing their Q2 FY '24 results. They expressed confidence in meeting their production and dispatch targets for the year, aiming to hit a 780 million tonnes mark. There has been notable growth in both coal production and dispatches with a particular emphasis on continuous growth post H1 results and planning for Q3. A robust growth of 33% in coal-based power was observed in the month of October alone, indicating strong demand for coal.
Subsidiary-wise, MCL (Mahanadi Coalfields Limited) faced a temporary setback due to land acquisition issues but turned around its performance and is expected to reach its 204 million tonne target. BCCL (Bharat Coking Coal Limited) and CCL (Central Coalfields Limited) are on track with their growth trajectory, embodying an 11% increase for BCCL as it drives toward a 41 million tonne target for the year.
Coal India reported a high e-auction premium over the notified price, averaging at 90%. The e-auction volume for the second half of the year is targeted to be around 15-20%, securing profitability not solely through e-auction but also attributed to efficient operational practices across the ecosystem.
Capital expenditures (CapEx) for the year stand at INR 16,500 crores, with funds earmarked for land, First Mile Connectivity (FMC) projects, washeries, infrastructure development, and railway projects. In particular, the company is focusing on enhancing its sustainability through investments in solar power, with plans to achieve 3,000 megawatts in the coming years. This includes a targeted equity contribution of up to INR 7,000 crores for its solar project endeavors.
Looking ahead to FY '25, Coal India is confident of achieving a production target of 850 million tonnes. With incremental annual production goals, the company is on track to reach its 1 billion tonne target in the foreseeable future. Efficiency in operations is anticipated to continue, contributing to profitability while managing costs effectively, especially as workforce numbers are optimized.
Coal India is exploring diversification opportunities, including in the mining of alternative metals such as lithium and cobalt. The company is undertaking due diligence to assess these new areas strategically. Additionally, it plans to reduce its carbon footprint by scaling up mass production technology in underground mines while ensuring environmental care.
In a bid to enhance efficiency and independence, Coal India has developed its own e-auction platform, which will eventually phase out reliance on third-party services such as MSTC. This move signifies the company's effort to streamline its sales processes and improve accessibility to its resources.
Overall, Coal India exhibits optimism for the coming years with a solid growth strategy, an emphasis on operational efficiency, and judicious CapEx deployment. Ambitious targets ahead suggest the company is gearing up to meet the rising demand for coal and participate actively in renewable energy initiatives. The commitment to environmental responsibility and diversification points to a sustainable path forward amidst the global transition to cleaner energy sources.
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Ladies and gentlemen, good day, and welcome to the Q2 FY '24 Earnings Conference Call of Coal India hosted by Antique Stock Broking. There will be an opportunity for you to ask questions after the presentation concludes.
I now hand the conference over to Mr. Rohit Natarajan from Antique Stock Broking. Thank you, and over to you, sir.
Thank you, Zico. Good evening all, and thanks for logging in the call. We are pleased to host Shri P.M. Prasad, Chairman CIL, for the investor call post Q2 FY '24 earnings and to discuss his views on the coal sector. Along with him, we have Shri Debasish Nanda, Director Business Development and Director of Finance, Additional Charge; Shri Mukesh Choudhary, Director Marketing; Shri S.K. Mehta, CFO, ED Finance; Shri B.P. Dubey, Company Secretary.
Now I hand over the call to Shri B.P. Dubey, Company Secretary, CIL. Over to you, sir.
Thank you, Mr. Natarajan. I extend a warm welcome to all the participants to the conference call. CIL's top management led by Shri P.M. Prasad is there to address all the queries. The corporate presentation is in NSE and BSE website and also on the website Coal India Limited. The con call is expected to have a duration of around is 1 hour. I request all the participants to kindly adhere to the time line.
I request Mr. Natarajan to kindly -- before the meeting, I request the Chairman for his opening remarks.
Mr. Natarajan and all the participants, Jai Hind, a very good evening. And we welcome from Coal India. And we are ready, and whatever queries we are ready to answer. And with the encouraging H1 results both in coal production, dispatches and overburden removal and overall dispatches and also to powerhouses. Almost as per schedule, we are going, both Q1 and Q2. Our H1 is completed. And even month of November -- October and November, Q3 is also, as per schedule we are growing. And as per the target of 780 million tonnes this year, we are progressing.
Now over to you, we can...
Mr. Natarajan, you can probably start with Q&A session. I request participants to kindly introduce themselves one by one. Thank you.
[Operator Instructions] Our first question is from the line of Amit Dixit from ICICI Securities.
Yes. Congratulations for a good set of numbers. I have 2 questions. The first one, if I look at the subsidiary-wise volume for this year, so until October, what we have seen that MCL's volumes have remained quite flat, I mean, say, 1% growth YTD October. And I just wanted to understand what's going on over there because MCL was a subsidiary that showed very good growth over the past 2 years. So have we hit a plateau or something? Or what kind of long-term growth plans you have for the subsidiary? Also if you could highlight the incremental volume growth we can expect for BCCL? That would be great. This is my first question, sir.
Number one, in MCL, there was a land issue in 1 of the fields, Basundhara coalfield. From July 2 to almost July 27, almost 26 days, that field was stopped by villagers in demand of higher compensation of the land and other things, employment. We are -- immediately, from 2nd from 3rd, it was flagged Chief Secretary, Odisha and Ministry of Coal. But somehow, it was -- almost 3.5 weeks it has taken to settle. And the Team MCL and Team Coal India quite sure that target of 204 million will be ensured. And MCL, initially, it was lagging even in August, September, but now it has turned around and the company is in a growth trajectory. And we are pretty sure that it will do 204 million. There is no doubt, number one.
Number two, overburden, it is doing well. And other land issues, small issues, we are taking care. In case of BCCL, yes, it is in last 2 years, it is also stellar growth in the company, 36.18 million last year and 41 million this year we have to do. And with a growth of 11%, it is quite on course. There is, right from first month onwards. BCCL has steady growth. And BCCL will let you all the 3 parameters: production, coal dispatches to railway sector, power plants and also OB, all 3 it's going well.
So basically, you mentioned 41 million tonnes is the target for the year?
Yes.
Okay. Sir, the second question is on e-auction. So what is our targeted e-auction volume for the second half of the year? And if you could highlight the latest e-auction premium over notified price that is currently going on, on an average?
It is a percentage of premium was -- notified price, it is 90% at -- overall as Coal India as a whole. In BCCL it is 56%; ECL, 71%; CCL, 114%; NCL, 114%; Mahanadi, 107%. It is almost 90% premium over [indiscernible] whereas [ 20% ] offered in that -- whatever we offer, what the 51 million, 45.6 million was booked. So primarily, we have to supply these power plants and then we have to balance this e-auction. Both goes together. In power plant, we are supposed to give 610 million. We are quite sure that we will be committing and we will be fulfilling 610 million. And after that, this e-auction and other than that, supplies to [indiscernible] also we are taking care.
What do you expect e-auction volume to be for second half of the year, H2?
15% of production, you can say, roughly.
15% of production. Okay. And the current e-auction premium, you are saying is 90%?
90%.
Our next question is from the line of Alok Deora from Motilal Hosn.
Sir, I just had a couple of questions. Firstly, on the e-auction premium, which you mentioned about 90%, it has been a little volatile, where it went to around 50%, 60% in a few months back. So how do we see the e-auction premium moving ahead for this financial year?
Right now, it is moving ahead quite well, but it depends on many factors: one is the demand; and number two is other international prices, markets, import quantities. But as of now, the demand is there and we are quite sure the price consideration of imports is also being taken care. We are looking into that also. But the quantities are almost being booked.
Got it. And sir, this offtake has been pretty robust this year. So could you just comment on how the demand is right now in the last couple of months? How is it -- is the momentum continuing? Or any change you have seen in the demand pattern from across the MDO segment?
It is in October month alone, 33% coal-based power growth is there. And it is -- but for sure, until monsoon, it will continue. The way, the demand and the railways, power sector and our coal sector being build up, almost weekly twice or thrice the subgroup meetings are being held regularly to monitor that there is no shortage on account of coal supplies. And we are taking care. And almost it is every week, at least twice or thrice the subgroup, with all the 3 ministries, it is being taken care.
Got it, sir. Sir, just 1 last question. You actually mentioned about the e-auction volume for second half. So that 15% you mentioned is for the second half, right?
Yes, H2.
Our next question is from the line of Digant Haria from GreenEdge Wealth.
So my question is, sir, the last time in the call, you said that the improved profitability that we have seen over the last 4, 5 quarters is not because of abnormal profits on e-auction, but it is because of efficiency in the whole Coal India ecosystem. Sir, can you just elaborate more that is this efficiency just coming out of the lower employee cost? Or is our mining operation getting more and more efficient? And how much more can we get out of just this efficiency part? That's my question one, sir.
In the case of explosives and diesel, we are incurring less cost compared to previous year. This is 1 thing. Employee cost, though there is wage revision is there, that we have taken into consideration. But other factors, it is being curtailed. And the employee, overall manpower, we are having a slight reduction. Though the sales -- wages is there, but other factors like sales realization, it is there. And cost per tonne, there is not much increase whether it is -- decrease of 1% cost per tonne produced. Volumes -- since volumes have increased, both in case of dispatches, so our sales realization is being done and the overall production so that our stocks are also improving at our end. And recently, last 15 days trend, in this month, particularly, about 3 million-plus power plant side also, the coal stocks are also being increased.
Okay. Okay, sir. Sir, and the second question was that if we do reach our target of 1,000 million by -- in the next 2, 3 years, do you see that there will be enough demand for so much coal in India itself? Or we'll also have to look for more routes like export or something?
Enough coal -- enough coal for this up to 2030. There is absolutely -- there is no doubts. Future is very good secured and there is a heavy demand.
So basically, whatever we can mine, we can sell. That is what you are trying to say, right?
Definitely. Next 6 to 7 years, absolute, there is no issue. But I will say, it is up to 2040 also. But immediately, we will keep up to 2030 the projections, for the next 6, 7 years.
Okay. Okay, sir. Sir, and lastly, like do we see this 1,000 million this target by March '26, March '27, where do we see this -- our company reaching this goal?
Yes. We are progressing. Last year, [ 622 million to 703 million ], we are there. And again, in this year, 44 million in first 7.5 to 8 months, it is -- we are witnessing. So 780 million -- so next year it is 850 million. So incrementally, we are growing 11%, 12%.
Our next question is from the line of Hardik Jain from White Stone Financial Advisors Pvt Ltd.
Now we have 2 subsidiaries, CIL Solar PV Limited and CIL Navikarniya Urja Limited. So how much capital are we planning to infuse in the subsidiaries over the next 2 to 3 years? And what are our CapEx plans there over the next 2 to 3 years in these 2 subsidiaries?
Yes. See, much is being increased because this is in a solar we are entering, basically. Our net zero is, we have to go by 3,000 megawatts. So by this year-end, 250 megawatts we will be doing out of these 3,000. And one we have given in Gujarat, 100 megawatt. And one in Rajasthan, we are in discussions. But due to the elections, last 2, 3 months, it is getting delayed. They're about 119 megawatts we have to -- we are in discussion. And 900 megawatts they already agreed if we install at INR 2.64. So it is in different stages and identification of land banks, especially 300 acres at 2 places in the WCL and few places in SECL. And floating solar with the UPRVUNL in this Rihand dam, Similarly, 1 place in Hirakud also, we are in talks with Orissa. So we are in different stages of planning, and we will be increasing. So CapEx as a whole for Coal India, it is INR 16,500 crores. But with these 2 subsidiaries since the last 3 years only, we have started this solar, we will be going in a phased manner.
Okay. So this, say, over the next 4 to 5 years, if we have to do this 3,000 megawatt solar projects into 2 subsidiaries, which will be broadly around INR 15,000 to INR 18,000 crores just in solar, where equity contribution will be around, say, 30%, INR 5,000 crores, INR 6,000 crores, INR 7,000 core. And rest will be, I think subsidiaries will take the debt for the CapEx, right?
It's not exactly subsidiaries. First, we will get the orders. Coal India as a whole, I told INR 16,500 crores is this year's CapEx. In this maybe, as a whole, if you see, maybe INR 500 crores, INR 600 crores to -- as we ramp up the solar, that we will take care of this CapEx.
Right. Okay. And sir, in the annual report, you mentioned that our production target for FY '25 is 840 million tonnes. So for next year, what will be our FSA commitment? So what I understand is, as we incrementally increase our production, our proportion of e-auction will increase or our quantity of e-auction -- the quantity that we offer for e-auction should increase over and above our FSA commitment?
Yes, yes. It is going to increase 10% to -- 15% to 20% range, it will be there. So that we have to first fulfill parallelly the commitments of our sector. And parallelly, we will see this 15% to 20%...
Yes. So you mentioned that our FSA commitment for this year is, say, 610 million tonne, which may increase a little bit next year. So if next year, we produce 840 million tonnes. So our e-auction increase in a good way, right?
It will increase. It will increase in the same pro rata percentage, 15 to 20 percentage.
And sir, government recently, we read in newspapers, they want to mine other metals like say, lithium, cobalt and other rare earth minerals. So how do you see this opportunity for Coal India? And are we doing anything to tap this opportunity?
There are plenty of opportunities. This is a new field. Our team has also visited twice to Australia, Director BD and the team has visited. And that is at different stages. One is fully explored, that typical minerals, and others is to be explored and entirely greenfield. So the opportunities are there. Due diligence is being done at our level.
Okay. And sir, as we increase our production, most of this increment will be contributed by open cast mining? Or we'll have to do underground mining also as we move forward and increase our production?
At present, our underground share is very less, 25 million tonnes only. So there is a target of increasing from this 25 million tonnes to 100 million tonnes by 2030. So we are progressing on underground especially with continuous mines -- this mass production technology, increasing mass production technology. So that much portion, environmental angle also is taken care.
But the cost -- what would be the cost difference in open cast mining versus underground mining?
The cost difference is definitely there. If it is 1,000 tonnes our cost of production, if it is open cast, 8,000 tonnes to 9,000 tonnes -- underground maybe 2,100 tonnes, 2,100 tonnes. But we have to see the deeper deposits have to be done by underground only. There is initially our mechanization was a little lagging. But now with the mass production technology with continuous miners, 2 mines like Jhanjra and this Moonidih. Similarly, in SECL, a few mines are there, continuous miner, and -- underground -- 1 single continuous miner is also doing at least 7 lakh tonnes per annum, and with proper care of the environment. There the dust pollutions are less. The land degradation is almost nil, 0.
Right. And sir, last question is we have already started doing e-auction our own platform, coaleauction.co.in. So going forward, we'll do all our e-auctions on our own platform or we'll be using third-party platforms from companies like MSTC?
We are using our platform and we are going to be independent of that. Partly MSTC right now, we are taking their help, but we are also developing from CMPDI, our -- from Ranchi. By next year, we will be phasing out.
Our next question is from the line of Ashish Kejriwal from Nuvama Wealth Management.
Sir, a few questions from my side. You have mentioned about volume target, which is something like 12% Y-o-Y growth. So you are talking about, first of all, it's on a production target or offtake target? Because YTD, we have seen offtake increasing by just 9.5%. So -- and now the base will also increase from November onwards. So [indiscernible] increase also seems to be difficult. Then what could be our realistic volume target for this year? That's my first question.
Volume target-wise target is 780 million tonne coal production. 780 million tonne dispatch also we are supposed to do. But until production target is -- production achievement is around 12%, and uptake is 9% only, as you have rightly seen and noticed. Because of the rainy season, there will be generally -- July, August, September, there will be a little less. Right now we are peaking up and almost the festival season is almost ended. And up to Holi there is no distractions. The volumes of dispatches is also going to pick up, and it is being picked up in MCL, SECL, where the high volume of dispatches is expected. We are right now peaking it. And we will be achieving our dispatches target also.
Sir, reason being why I'm saying so because on an average also, on a month, we can do 60 million tonnes, 65 million tonnes maybe in a month. And if I do that calculation, our growth rate because of the high base of last year, it should come down by -- come down to 5% to 6% rather than 10% or 12%, which is required at least. So that's why -- what could be the probable or a realistic target, which we can achieve by looking at the monthly run rate which we have achieved so far?
First thing you have to understand, this dispatch target, it depends on other factors also, other power plants lifting come outside other than the railway. In railway and 2 areas, in Korba district, in SECL, 3 more mega projects are there. In Mahanadi, there is a little shortage of a rakes on a daily basis. Even in rainy season, we are supposed to load n number of rakes, we are getting in both these coalfields only, 5, 5 rakes less. So everyday loss is a loss at that particular place. But however, in CCL, BCCL, ECL, NCL, from railways end, there is no issue. Only at 2 fields in SECL, MCL, there is an issue. But it will be peaking up. And overall, if you do, say, [ 67 million, 65 million ] even by your understanding also, if we can start, will be increased at our end. Right now, it is 40 million, 41 million. Last year, it has went up to almost 65 million to 69 million. Now it is 41 million. So this 30 million, even if it ends -- even if it builds up at our end. And more plant side also, it is 20 million right now. Our target is to build there also at around 38 million. If we are there at 38 million. So at least 18 to 19 days, 20 days stock will be there. So in any case, first volumes has to come -- move from beneath the ground to surface and vis-a-vis from there to power plants. And we should focus and we will focus.
Sure. So second question is on the basis of the current evacuation facility, how much maximum we can sell?
You question about facility, I am just telling you. In 3, 4 subsidiaries, as such, there is a facility where there is no issue. There's CCL, I'm just telling an example. Tori-Shivpur line, second line has been commissioned, third line is also going to be commissioned. There, the company is doing 84 million, but we have developed at least 110 million evacuation facility -- whereas in some subsidiaries, a little less. So almost we will be targeting right now about 320 rakes per day. So gradually, we will be touching up to 330 rakes, 340 rakes.
Evacuation, wherever it is less, even CERL, 1 line at Raigarh, which has been recently commissioned by -- Honorable PM has inaugurated. Similarly, the third line is also be commissioned in Jharsuguda-Barpali. In MCL, 1 line is being under construction. Similarly, CEWRL -- Chhattisgarh East West -- CEWRL. So different railway lines under different subsidiaries are also under construction. And 1 thing is for us to achieve these railways connections and the other railway sidings and FMCs, almost all parallel activities are being undertaken. For that also yearly target, quarterly and half-yearly targets, developmental activities is also being monitored. If those are taken care, this evacuation -- there will be moving forward.
Okay. So sir, to sum it up, I think from the evacuation side, if demand purchase, we can do 780 million as well as 840 million also next year. That's right?
Definitely.
Okay. The second question is on the employee cost. Though we have already renegotiated and everything has been more or less done, but there was some issue on account of offices and non-offices. So first of all, the status of that? And secondly, is it possible to guide us on the total employee cost which one can expect this year?
The employee cost about -- it will be 46% -- 46,000 crores. And percentage-wise also 40% -- overall less than last year.
So employee cost-wise, there is no issue with the growing volumes. And that is a settled thing. That is internal -- there was some DP circular -- some conflict is there. But that is being taken care of and we are also addressing this. So about INR 46,000 crores is the employee most of the total volume.
That's great. And then lastly, while we are doing fantastic in terms of First Mile Connectivity project, we are investing close to INR 25,000 crores in that. So though it is beneficial from the environmental side as well as increasing the evacuation facility properly. But is it possible to share some kind of savings in terms of numbers, what we can earn or what kind of payback period we can have on this investment of INR 25,000 crores?
INR 24,700 crores in a 6 to 7 years' period. Right now, we are having an installed capacity up to 2.8 million. And every year it will be adding -- by NEERI, National Environment Engineering Research Institute of Nagpur has done the study in 2 projects. One is in Kusmunda and one is in Lingaraj. In both the fields, only 2 projects after that commissioning, we are saving, say, in 1 project INR 25 crores and another project INR 50 crores for 1 year only. More than that, the dust emissions and [indiscernible] and other carbon emissions, there was controlled -- it was reduced by 75% to 80%. That is huge. So it is not that only CapEx recovery are -- this thing, but this environmental factors play a greater role. So in each area, whenever this tipper density is reduced, number one, safety is increased. And this dust pollution and other diesel savings, everything is there. So the payback period-wise, parallelly every 6 months, 3 months, it will be the -- whatever cost we are incurring, it will be recovered. And it will help not only in environmental, safety-wise also it is increasing. So there is a dense population is also going through. So the CHPs are coming nearer, track lines are coming nearer. So safety aspect other than environmental also comes into the picture.
Our next question is from the line of Kirtan Mehta from BOB Capital Markets.
One question coming back to the evacuation capacity. If we look at the 840 million tonne production target for next year and the current evacuation capacity, where are the subsidiaries where we will need capacity -- evacuation capacity increase to deliver on the next year's target?
Primarily, it is the MCL and SECL. In SECL, also, we are focusing in both the fields -- at least, there is a need the increase of 40 to 50 rakes. So 1 portion of MCL is this Jharsuguda-Barpali-Sardega. Sardega initially with 2 sidings we have started, 1 more siding is being added. And 1 more -- from [ Garden Reach ], there is 1 more Laikera siding. We are taking that siding around 4 rakes -- 4 rakes means 4 million. If we add 50 rakes in a subsidiary, almost it is 50 million tonnes. So Jharsuguda-Barpali, that side field, we'll be targeting about 25 million to 30 million -- 25 million. And similarly, in the [indiscernible] also another 15 million, 20 million.
And silos are also being commissioned, that's [indiscernible]. once this is commissioned, the rake loading time from 3.5, 4 hours, it will be reduced to 45 minutes. Turnover of the rakes will also be increased. Similarly, in SECL also, there is [indiscernible] projects are under execution. Similarly, CERL, as I told, in Raigarh coalfield, there will be an increase there about 10 million to 15 million. Similarly, CERWL (sic) [ CEWRL ], the East-West Railway corridor. That will also take 1 more year. But with that [indiscernible] it will be taken care. And if that company SECL -- this year, it is 197 million. Next year, it is 220 million. After that, '25, '26 it is almost 50 million to 60 million. So next 50 million to 60 million growth in both the companies are being taken care of this construction of this railway lines, silos and belt conveyers. So in 1 project, Hingula, there is a belt conveyer is under construction. It is a pipe belt conveyer. Completely eliminating that with that belt conveyer to silo loading, around 5, 6 kilometers. Similar other MGRs, these are in place.
One more question about the MDO operations that we have started. So we have started a projection at 3 projects at this point of time. So what is the production run rate that we are achieving? And what would be the exit rate from the MDO production by the end of this year and the next year?
Total 15 projects in the last 1-year period we initiated Out of 15, there are open cast and underground, mixed. One project [indiscernible] has started production. Sonbhadra awarded Stage 1 -- even just by simply awarding MDO also does not serve. But we should get EC, FC. So 1 underground project of SECL, MDO has started. One in open cast, we have started in [indiscernible] in MCL. Similarly, under execution, 2 mines in CCL. One is KBP mine. Stage 1 clearance we have got. Environment clearance we have got. Maybe by next year, it will start a marginal production of 1 million, '24'-'25 -- FY '25. But '25-'26, that KBP, similarly [indiscernible] almost ECA onetime hearing is done. And FCA, it is [indiscernible] pending. So maybe in another 8 to 10 months, another 4, 5 MDOs will start operating. So an incremental from these MDOs in '24-'25, maybe about 20 million, 25 million. But '25-'26, but for sure, it will be around 60 million, 55 million to 60 million.
Our next question is from the line of Bharani Vijayakumar from Spark Capital.
So I just want to know the split of the dispatches in first of FY '24 between power sector and non-power sector.
Total -- our H1 uptake is 360 million tonnes, 360.66 million tonnes. And power sector is 295.36 million tonnes, around 80%. 60 million is a gone to non-power.
Okay. So around 80% of e-auction would also be roughly to power sector?
E-auction is fully non-power.
Okay. So the e-auction volume of around 32 million tonnes in 1H is fully non-power?
The power can participate, but generally it is non-power bidding.
Okay, okay. What is our dispatch target for FY '25, sir?
FY '25, it is around 850-odd million. Whatever we are producing, we are keeping that much. Maybe production at some point in February, March, it is more. At that time, there may be adding of stocks, about slightly 10 million, 15 million maybe less dispatches. But it will be adding our stocks, and that will take care in monsoon.
Okay, okay. My next question is on the CapEx. So this INR 16,500 crores CapEx. Can you give a split of what is the -- use of this CapEx broadly? Like how much goes to equipment, how much goes to non-equipment? And within equipment, what are the main equipments that we are buying?
It is total -- out of INR 16,500 crores, 1 is under -- 1 major hedge is land. Other than land, there is -- the FMC projects are there [indiscernible] equipments we are going to buy. But HEMM -- under the hedge of HEMM and some [indiscernible] and this other construction activities of power line substations. But primarily, these are distributed in the major hedge of land, FMC, watch base, infrastructure development and railway projects. This railway, we are doing under deposit schemes are also [indiscernible] one is directly deposit. And another is JV route, subsidiary of railway, either [indiscernible] along with the state government local and subsidiary company.
And other than this, solar projects [indiscernible] and this power plant, 1 per plant, we are going to some MBPL. Also in this INR 16,500 crores, it is being incurred. And a few diversification projects like HURL and TFL -- Talcher Fertilisers and HURL.
Okay. Can you give a split of land and equipment alone in the INR 16,500 crores sir?
Land is about INR 2,000 crores to INR 2,500 crores. But it is as per the demand. It some times if the land acquisition -- last year, it is INR 4,000 crores -- last year it has gone -- it is INR 4,000 crores. This time it is INR 3,000 crores, INR 3,500 crores we're anticipating.
And equipment, sir?
Equipment this year, it is not much. This year, it is our activities are much. But otherwise, it is also around -- INR 2,000 crores -- it is INR 2,000 crores -- INR 1,965 crores, equipment.
Okay, okay. My final question is on the employee cost. Of course, we put the last revision in FY '23. Can you refresh us basically on when is the next revision is due for the nonexecutive and the executive cadre?
Non-executive, '26. Executive cadre, it is '27.
[Operator Instructions] Next question is from the line of [ Vipul Kumar Shah ] from Sumangal Investment.
Congratulations for a very good set of numbers. Sir, on Slide 16, if I see MCL and NCL, we are producing very high production with less number of employees. So why this cannot be applied to other subsidiaries? So what is the reason for that? In MCL, we have produced 89.4 million tonnes with just 21,523 employees.
MCL has carved out in 1992, it was carved out from SECL [indiscernible] from Central Coalfields. So relatively new mines, open cast mines, stripping ratio is very less. The overburden and coal, the ratio is very less. And the number of underground mines is only 2 to 3 are operational. Whereas if you see in SECL, the number of underground mines is maybe 30. Even in ECL, it is around 30, 35. So underground, old manpower is there. So we cannot just get rid of them. So as a company, we are having a policy. Right now, it is like 235,000 employee strength. In a 5- to 10-year period, almost every year, 5% is being the attrition with this natural retirements and other things. So SECL, WCL, ECL, BCCL, it is manpower-wise high. So overall, it is 235,000. So MCL is the lowest, maybe around 15,500. Next is Mahanadi. Mahanadi's overburden is very less. There are less cover and number of mines are very limited and highly productive mines.
And my second question is regarding volume of washed coal. So over the next 2, 3 years, what kind of increment we can see in the volume of washed coal?
Non-coking for next 2 years, 10 million tonnes, we are adding in Lakhanpur. It is under a trial run. Immediately, it will come up. This 10 million straight is being added. In coking coal both in BCCL and CCL. BCCL, it will be added almost 2 to 3 washeries have come up and they will be significantly increasing year-on-year. And in CCL, we are just awarded. It will take 2 to 3 years. So FY '26-'27, it will be added. The construction period is 2 to 3 years in both BCCL and CCL, but in a phased manner, about 7 to 8 washeries, coking coal washeries are being added. So the moment it is done, it will be producing.
So every year, what type of volume increase we can see in million tonnes?
You can -- in coking coal last 2 years, the incremental of 20% it is already there. And next 2 to 3 years also, you can -- that 20% to 30% coking coal washeries, it will be added. And in non-coking coal, only 1 washery at Ashoka Piparwar. In CCL -- is under implementation, under operation. Now this Lakhanpur, 10 million tonne washery is being added. So this 10 million is straightly it will be added to the non-coking coal also from this year. This year, it may be balanced months, maybe 2 million. But for next year, it will be 10 million.
Our next question is from the line of Noel Vaz from Union Asset Management.
My questions have been answered.
Our next question is from the line of Amit Dikshit from ICICI Securities.
Yes. I have 2 questions again. The first one is on the possible FSA price hike. So traditionally, we have seen that the FSA price hike given to us is just enough to cover the wage cost, but it was not so this time around. Now since e-auction premium has also come off from that time. So do we expect to get some additional FSA price hike anytime soon?
Exactly not right now. In the near future -- we are not seeing anything up to the next 7, 8 months.
Okay. Until election time, maybe?
For non-power prices, maybe we can see. But for power sector, we are not going to touch in the next 1 year.
Okay. So considering whatever we have as of now in terms of railway lines, in terms of FMC, while the long-term targets are very well appreciated, what kind of evacuation capability in all do we have as of now in FY '24? And what would be our evacuation capability in FY '25?
FY '25, 850 million, we are capable Here, we have to understand whether it is FMC project or whether it is railway line. EC, FC, land clearances and the greenfield projects obtaining, the time will be taking for any forest bit if it is there. So we have the [indiscernible] apply, it will go to MoF to state. And there is parallel activities coming. So the 850 million in FY '25, we don't see any difficulty. 100%, it will be achieved.
Okay. So 850 million tonne we'll be having in FY '25. But, I mean, the slide you have mentioned that FMC, this capability would only come to [indiscernible] 930 million tonnes by FY '28-'29. And given our target is 1 billion tonne, I think, for FY '27, so I mean, that 1 billion tonne target is still intact, right, FY '27 contingent on demand?
That is intact. And surface miner, this [indiscernible] also we're increasing year by year so that instead of crushing by deploying more surface miners, environment friendly, we are increasing that production also. So directly, it can go to power plants. So wharf wall loadings, we are eliminating in an orderly manner with this silo loadings. So the construction time of 1 to 2 years, it is being taken. So right now, it is 228 million. Within 2 years, it's maybe touching 450 million. And wherever we are -- these crushers and silos, where it is taking time, but surface miner production can be directly fed to the wharf wall and it is also being dispatched. Dispatches [indiscernible], there is no issue.
Our next question is from the line of Indrajit Agarwal from CLSA.
I have 1 question. When we look at the non-power FSA that we have, is it now all moved to the new mechanism of auction based? Or do we still have some old mechanism FSA, which is price-based as per the old pricing mechanism?
11 million tonnes through CPSE, that is there. But the prices are indexed with that. But other than that, we are going through this new [indiscernible] auctions also will be there -- all other -- auctions are there [indiscernible] 9 billion tonnes.
So right now, of the non-power FSA that we sell, how much is still under the old mechanism, which can still move to like an auction mechanism and hence lead to higher prices for us?
We are selling 11 million tonnes.
[Operator Instructions] Our next question is from the line of Mr. Rohit Natarajan from Antique Stock Broking.
So the railway joint venture that we have with IRCON, I see that there is a slippage of the commissioning date as such. What could possibly be the realistic time frame in which you could conclude the project?
In IRCON, in 3 places we are working, more than 3 also. But Shivpur-Kathautia is on time in CCL. There, you have to understand the state government has demanded land cost along with market rate. So there is bankers problem is also there for getting loans. So we have requested state government, we cannot go on market rate. It should be on this government land rate, maybe aggregated into 1.5x. That is being considered at Chief Secretary level.
Similarly in CERL and CEWRL, that is being taken care. So there are some issues sometimes it comes up. So by and large, if you see railway projects on a deposit basis are the joint venture, it may take 3, 4 months this way, that way. But it is more or less in tandem it is going on. The moment these hurdles, somewhere it is forest clearance or these other issues with the state governments. Once it is cleared, the actual laying and other things, the contractors are in place. Only if you make them the land available, then the other things will be parallelly it is being executed. Somewhere some minor bridges, major bridges are also to come from rainy seasons and peak seasons, there may be 2 to 3 months issue. But as I tell in Jharkhand, the project is on time.
Next question is from the line of Ashish Kejriwal from Nuvama Wealth Management.
Sir, to lead to 1 billion tonne target, how much CapEx is required for our production, power, land acquisition or our evacuation facilities to reach to the target? A ballpark figure will also do.
Every year, say, this year, INR 16,500 crores. Next year maybe INR 18,000 crores to INR 19,000 crores. It is around that range -- it will be around INR 19,000 crores. But once we complete this First Mile Connectivity projects, after 5, 6 years -- for the next 4, 5 years, it is on that range, even some coal gasification projects are also has to come. If a successful bidder will come, then it will be in this range only, INR 18,000 crore to INR 20,000 crores.
Sir, my question is not to different projects, only projects which will lead to 1 billion tonne of our coal production per year, which includes, obviously, First Mile Connectivity. So how much...
First Mile, INR 24,700 crores in the next 5 years, first Mile only. But in railway, there is other works are also going on. So some railway deposit works are going on, some railway joint venture with IRCON -- and some local sidings we have to develop. That is parallel activities. Maybe that also, per year, if you split this INR 24,700 crores, say, in 5 years, maybe INR 5,000 crores per year. Similarly, railway also maybe INR 2,000 crores to INR 3,000 crores per year. And MDOs [indiscernible] CapEx will be reduced.
So sir, is it safe to assume that for next 5 years, we can do CapEx of something like INR 80,000 crores?
5 years you put together? Yes.
5-year put together. And that will help us in evacuating 1 billion tonne provided demand there?
Even -- the demand is definitely there. From our side, we are selling 20 years -- 15 to 20 years. But for projection side, we are only talking up to '25.
Understood. So sir, my question was that in next 5 years, we will achieve 1 billion tonne target. And obviously, we don't want to go much beyond that. And thereafter, maybe we can start moving in a non-coal areas where your CapEx will continue to be INR 1,500 crore to INR 2,000 crore per year for foreseeable future. Or something else is there in our mind in order to divert it from fossil fuel?
In solar, in coal to gasification and other thermal plants, just like MBPL; MPGCL, 1 more plant along with the state of Madhya Pradesh, we are going in a JV 660 megawatts. So similar things are -- we are also looking after to diversify and to get other incomes from other operations other than coal mining.
Okay. And sir, next question is in one of your replies earlier, you mentioned, I think that second half, our target for e-auction coal volume is 15% of the production. Am I right?
Yes.
So if I'm doing -- because power demand, if it's there, because of which only we are very much confident about the volume growth. And in first half, if you see, we have done only 9% of our volume. So do you think that 15% of that entire volume in second half is possible for us? Or is there a demand slowdown which we are facing in the power sector, which will lead to higher offtake in power sector?
It is possible because usually December to March, it is productive months. Demand is increasing day by day. Demand has never reduced or never stagnant. It is continuously -- last 1 month, it is peaking up only, every month. It is -- even in Ministry of Power's projections also it is actually...
That's the reason, sir, I'm asking because power demand is increasing. So can we provide higher volume to e-action. We were thinking it will be lower than that, but...
We can provide. Power plants, initially, we will meet their targets. We will keep in mind by keeping their targets, and we will be touching this 15% also, both things we will keep in mind.
Our next question is from the line of Bharanidhar Vijayakumar from Spark Capital.
Sir, can you help me with the person and the contact details to contact from investors' point of view?
Company Secretary's name is already there, Mr. Dubey. You can put in that mail if anything is needed, any information is needed.
Okay. And that mail ID would be, sir?
Yes. You talk to Mr. Natarajan. He will provide you details, okay? It's given there, okay?
Okay. My second question is on e-auction. So what are the different methodology of e-auction that is right now ongoing?
Linkage and spot auction. Dedicated linkages which are there. Spot auctions.
And predominantly, the volume is happening through the spot mode, right, more than linkage mode?
Yes, yes. Auctions mostly for spot only.
Okay. What is the time lag between buyer booking and we actually getting it delivered? And what will be our time period for which we will recognize that revenue? So if booking is done in this month, when we'll actually recognize that as revenue?
We can start 8 to 10 days, and we might take the local clearances from the district mining officer and the Director of Mines of the state government. But 10 days is a sufficient period where we can delivery once he books and clears the auction.
Okay. So when you are telling recent notified price and e-auction premium, over that is 90%. So that would be, say, after -- say, next month itself?
It is 3 months, they can lift it -- they have to lift.
Okay. So maximum 3 months. Okay.
Thank you. Ladies and gentlemen, that was the last question of a question-and-answer session. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Thank you, Mr. Natarajan. I'd like to thank all the participants for this conference call, for the excellent reasons. Thank you, and we hope to meet you in the next quarter again. Thank you, once again, to all.
Thank you. On behalf of anti Stock Broking, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.