COAL IN­DIA PLANS BIG­GEST TECH­NOL­OGY OVER­HAUL TO CHECK RAM­PANT THEFT

Resource Digest - - NEWS -

Coal In­dia Ltd is mak­ing its big­gest tech over­haul in four decades to check ram­pant theft and shed its im­age as an in­ef­fi­cient be­he­moth, spurred by an im­pend­ing open­ing up of the sec­tor to pri­vate play­ers for the first time since the 1970s.

The state-run com­pany's mo­nop­oly had al­lowed it to de­lay the use of mod­ern tech­nol­ogy com­mon in in­ter­na­tional min­ing, but it can­not af­ford to wait any longer as the govern­ment is set to soon an­nounce a plan to al­low pri­vate com­peti­tors like Adani Group to mine and sell coal.

Coal In­dia's pro­duc­tiv­ity is es­ti­mated at just one-eighth of its tech­no­log­i­cally ad­vanced ri­vals in the United States, and as much as a fifth of its an­nual out­put is stolen, cost­ing the com­pany up to $1 bil­lion each year.

Lo­cal "coal mafias" have fought for years to con­trol rack­ets that prey on the in­dus­try and feed a vast black mar­ket. Tac­tics range from in­fil­trat­ing unions and trans­port op­er­a­tions to bribery, ex­tor­tion and out­right theft of coal.

Un­der Prime Min­is­ter Naren­dra Modi's govern­ment, Coal In­dia has raised out­put at a record pace, helped by ac­cel­er­ated en­vi­ron­men­tal clear­ances, though this has prompted crit­i­cism that the world's third-largest car­bon emit­ter is not do­ing enough to check cli­mate change.

To build on those out­put gains and meet a tar­get to dou­ble pro­duc­tion to 1 bil­lion tonnes by 2020, coal sec­re­tary Anil Swarup is pri­or­i­tiz­ing tech mod­ern­iza­tion, al­ready im­ple­mented at Ma­hanadi Coal­fields, a Coal In­dia unit.

Swarup wants all seven of Coal In­dia's pro­duc­ing units to use a Gps-based track­ing sys­tem for their trucks and Google maps to elec­tron­i­cally "fence" min­ing ar­eas, which will alert man­agers if a truck di­verts from its route. Swarup will re­view the units' pre­pared­ness this month.

LIN­ING UP

The upgrade is ex­pected to cost around 3.5 bil­lion ru­pees ($52 mil­lion) ini­tially, but the at­trac­tion of work­ing with the world's largest coal min­ing com­pany and the prom­ise of fol­low-on busi­ness is lur­ing some ma­jor com­pa­nies.

In­dian soft­ware gi­ants, in­clud­ing Wipro, as well as US com­pany Honey­well and France's Or­ange, are lin­ing up for con­tracts, with fresh ten­ders to be launched pos­si­bly by March, Ma­hanadi ex­ec­u­tive Deepak Sri­vas­tava said.

Azim Premji, the bil­lion­aire chair­man of Wipro, In­dia's third-largest soft­ware ser­vices ex­porter, re­cently met Swarup to of­fer some of the com­pany's track­ing tech­nolo­gies.

"This is Coal In­dia's big­gest tech­no­log­i­cal over­haul, and its im­pact would be in bil­lions of dol­lars," Swarup said. "The whole shift to­wards sup­ply­ing qual­ity coal to cus­tomers fur­ther in­creases the use of tech­nol­ogy to avoid pil­fer­age."

Last year, Ma­hanadi black­listed third-party con­trac­tors of 36 trucks, each car­ry­ing up to 17 tonnes of coal, af­ter man­agers re­ceived tele­phone alerts of route vi­o­la­tions that could have led to theft, said Sri­vas­tava.

CHANG­ING PER­CEP­TIONS

The tech over­haul may also help Coal In­dia change per­cep­tions that it's a slow-mov­ing govern­ment gi­ant, de­ter­ring in­vestors from buy­ing its shares de­spite its dom­i­nant po­si­tion in a re­source-rich and en­ergy-hun­gry coun­try.

Other lo­cal firms such as CMC Ltd, ARS Soft­ware En­gi­neer­ing and Arya Om­nitalk Wire­less So­lu­tions have shown in­ter­est in bid­ding for con­tracts to sup­ply Coal In­dia with track­ing and mon­i­tor­ing devices, in­clud­ing CCTV.

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