Coal is the new gold.
In 2010, when the government went to the stock market with the world's largest coal company, its selling pitch was: Coal India is Gold India.
Not surprising that investors lapped it up and India's largest public offering made a stellar listing. It was history of sorts.
This month, Coal India is gearing up to script another story -- this one, with a change of guard.
Partha S Bhattacharyya, the chairman and managing director, considered instrumental in the magical turnaround of the company, steps down in February. Who will step into his shoes and steer a company that is the country's fourth-largest in terms of market capitalisation?
With the Public Enterprises Selection Board shortlisting two candidates -- Tapas Kumar Lahiry and Dinesh Chandra Garg -- for the post after interviews, one thing is sure: The successor is going to be an insider.
Lahiry, the frontrunner, is the CMD of Bharat Coking Coal Ltd, while Garg heads the Western Coalfields Ltd. The Cabinet Committee on Economic Affairs will take a final call on who the successor will be.
"Normally, the first name gets cleared in the selection process. But you don't know, wonders may happen sometimes," a company executive said.
Among the seven people who were in the race, two more -- R Mohandas, director (personnel and industrial relation), and Northern Coalfields CMD V K Singh -- were internal candidates.
The external were Nalco director (finance) B L Bagra, NHPC director (finance) A B L Srivastava and Braithwaite CMD S K Rishi.
Who will get the baton?If company executives are to be believed, Lahiry is set to be the man who will step into Bhattacharyya's shoes. Before being elevated as the CMD of BCCL in 2008, he worked in various managerial capacities in WCL, South Eastern Coalfields Ltd, Eastern Coalfields Ltd and BCCL.
An internationally acclaimed mining specialist, Lahiry graduated in mining engineering from the Indian School of Mines, Dhanbad, in 1976, and holds a first-class mine managers' certificate of competency for both coal and metal.
He worked in the Kanhan area in WCL in the 1980s before working in Gevra, Dipika, Bishrampur and Raigarah areas in SECL in the 1990s until 2005.
Lahiry is popularly known as a magic man by his colleagues, as he wears many feathers in his cap.
"BCCL was a perennial loss maker before he took charge. But Lahiry, along with Bhattacharyya, turned the company around. He brought about a change in work culture and his devotion to the company translated into miraculous results," said R R Prasad, chief of corporate communications, BCCL.
BCCL's turnover stood at above Rs 5,000 crore (Rs 50 billion) and it posted a profit of nearly Rs 800 crore (Rs 8 billion) in 2009-10, which is the highest ever since the company's inception.
It expects to set another record by touching the Rs 1,000-crore (Rs 10-billion) mark in profit this financial year and surpass its annual production target. It is also likely to come out of its accumulated losses of Rs 5,000 crore (Rs 50-billion) in 2011-12 -- much earlier than envisaged.
Critics, however, feel the booming commodity markets should also get its due share of acknowledgement. Coking coal prices have soared over the past year.
Lahiry's tenure as chief general manager of SECL's Raigarh area also saw the area contributing about 26 per cent to the company's production growth, posting a 356.82 per cent rise in profit.
"One of his major initiatives in BCCL was the plan to establish six new washeries. He also introduced piece-rated loader concept, making most of our mines mechanised," Prasad said.
"Lahiry was also involved in many CSR activities.
"He was instrumental in the setting up of Jharia Rehabilitation and Development Authority -- which works on the rehabilitation and resettlement of non-BCCL people residing in fire and subsidence-affected areas of Jharia Coalfield," he added.
Lahiry has a proven expertise in solving land issues, like the one in the Dipika Expansion project of SECL.
Vacating of Chainpur village, where the impasse lingered for six years affecting production is another example.
He carried this forward as the technical director of BCCL, where he solved land issues at Kessurgarh and Vishwakarma open cast projects, which had been stalled for decades. So, CIL insiders believe that the road ahead is in Lahiry's safe hands.
There are voices in support of Garg too.
"I believe that Coal India now needs a leader like Bhattacharyya, who, though not from a technical or mining background, is one of the best chairman the company ever had. Garg's working style is similar to Bhattacharyya's.
"He has a knack for making quick decisions and picking up things in a short period," a top official from WCL said. Garg, who replaced G S Chugh as WCL head in 2007, is a person who has grown through the ranks.
"Earlier, he has held charges of director (personnel) at BCCL, Dhanbad, and general manager (personnel and welfare) at WCL.
"Garg, who is a geologist, has a vast experience -- of over three decades of service in different capacities at WCL, Northern Coalfields Ltd and Singrauli.
If he gets the top job, this experience is going to guide him," the official added.
However, the recent flooding of the 3.5-million-tonne Umrer open cast mine, which has to be closed down, stands as a black mark in Garg's resume, even as a major mining disaster was averted.
Challenges ahead
Whoever wins the race for the top job will have a mighty task on hand -- from increasing the production rate, which may fall 16 million tonnes short of target this financial year and even miss the expected additional output by 39 million tonnes the next, to solving the ongoing tussle of 'go' and 'no-go' areas with the environment ministry.
Coal India has set a production target of 260.5 million tonnes in 2010-11 and planned to produce 486.5 million tonnes of coal in 2011-12. It contributes around 85 per cent of the country's total coal production and is considered the backbone of the 'power for all' programme.
"My successor will have many challenges to face. The major one is to pursue the government for a faster decision on environmental issues, so that he knows his boundaries.
"He should adopt a quick-learn process and implement the washery programme faster. If the company is not able to grow in production, we should make up for it on the value addition front. He will also have to prioritise social and environmental sustainability," Bhattacharyya said.
Coal India has embarked upon an ambitious Rs 3,000-crore (Rs 30-billion) plan to wash almost half of its output by setting up nearly 20 washeries, which will increase the value of its output manifold and bring it closer to international prices.
Moreover, the onus is on the next chairman to fructify the overseas venture -- including a Massey Energy asset in the US and a Peabody Energy mine in Australia.
Along with it, the company has to address the logistical challenges. The PSU has interests in countries like Indonesia, South Africa, Mozambique, Botswana, Zambia and Kenya.
The next CMD will also have to keep investors' interest in mind while implementing its programmes. Analysts, however, do not see an immediate impact of the change in guard.
"There will not be an immediate impact on markets. But there will be many concerns in the minds of investors. Though CIL has top-quality reserves, the rate at which the mining is happening should be much faster.
"Price is also a matter of worry, CIL is selling majority of coal at 50 per cent less than the market price.
"Though acquisition plans are lined up, the lag in taking decision may also affect investor sentiments. The new chief should look into all these aspects," said Ravindra Deshpande, an analyst with Elara Capital.
Whatever the constraints of the company, all eyes are now on the Cabinet committee, as it decides who will head the company.
Coal is the new gold.
