Coal India facing shortage of mining equipment and poor quality supplies

Coal India Ltd is facing a shortage of mining equipment and poor quality supplies that are failing often, according to its chairman NC Jha. It may be noted that two PSUs — Bharat Earth Movers Limited (BEML) and Heavy Engineering Corporation (HEC) – are the major suppliers to Coal India.

Speaking to Business Standard here recently, Jha said that one of the major challenges for the company is the availability and quality of mining equipment. For instance, while CIL needs dumpers with a capacity of 240 tonne, BEML can only supply only 100 tonne capacity trucks.

"We are now importing. We told BEML to source a technology and start manufacturing higher capacity dumpers,&" said Jha.

According to industry sources, the market size of mining equipment in the country is estimated to be over Rs 10,000 crore. This industry is also highly competitive with over 100 companies of public (nearly 70%) and private sector companies (about 30% including joint ventures and closely held companies).

Of the proposed capital investment by Coal India of around Rs 4,200 crore for this fiscal, 80 per cent will be towards procuring equipments.

"Near time it is not an issue, but long-term it will affect the business and they are losing big opportunity,&" he said.

The other major issue is the quality of equipment. "It fails during the warranty period itself. We have asked them to improve the quality, performance and the availability,&" Jha said. They must improve the research and development (R & D) to increase the components quality. It is small components which fail and distrub the work, said Jha.