Understanding Cash Flow & Revenue Metrics for a Captive Coal Block for a Thermal Power Plant in India

Cash Flow for Open Cast Coal Block

There are three parameters namely Capital expenditure, Year on year expenses and revenue generated from power sales that would govern the cash flows. These factors are put to variance using the discount factor of 12% . For an open cast mine we have considered an example of Radhikapur (West) Coal Block which has two components in mining i.e. open cast and under ground both. For the open cast mine portion we have considered the cash flow analysis for first ten years which is shown in Table 10.1

table-01-cash-flows-for-first-ten-years-of-radhikapur-west-oc-block

The cash flows when depicted on a chart format would appear as in Exhibit 01 for the Open Cast operated mine as shown below.

exhibit-01-cash-flows-and-trends-for-first-ten-years-of-radhikapur-west-oc-block

Cash Flow for Under Ground Coal Block

There are three parameters namely Capital expenditure, Year on year expenses and revenue generated from power sales that would govern the cash flows. These factors are put to variance using the discount factor of 12% . For an open cast mine we have considered an example of Radhikapur (West) Coal Block which has two components in mining i.e. open cast and under ground both. For the open cast mine portion we have considered the cash flow analysis for first ten years which is shown in Table  02.

table-02-cash-flows-for-first-ten-years-of-radhikapur-west-ug-block

The cash flows when depicted on a chart format would appear as in Exhibit 02 for the UG operated mine as shown below.

exhibit-02-cash-flows-and-trends-for-first-ten-years-of-radhikapur-west-ug-block

*The views expressed in this article are solely those of enincon perspectives and do not necessarily represent those of Enincon LLP.

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