CIL production crosses target on govt pressure

Coal production in north India would normally be lower in the first half compared with the second half of the year due to waterlogging in mines during monsoon.

Of late, Prime Minister Manmohan Singh has taken a keen interest to improve fuel supplies to industries, especially the power sector. Singh's principal secretary Pulok Chatterjee has been holding regular meetings with coal ministry and CIL officials to speed up resolution of fuel issues for the power sector.

CIL's production turnaround seems to be a result of pure government pressure, with its entire incremental production coming from existing mines. The coal producer has not commissioned any new mining project during this period.

Analysts, however, said the question is whether CIL could sustain the momentum. “CIL is stressing on improving production from existing mines, which is reflected in its financial performance. The efforts seem to be sustainable,” said Dilip Kumar Jena, senior consultant and knowledge manager, mining, PwC.

India imported 89 million tonnes of coal during 2011-12 and the figure is expected to cross 100 million tonnes this year. Given the recent trend of stagnation at CIL, the Planning Commission had estimated that India's coal imports could rise to 138 million tonnes in the year 2016-17. This could drain out $ 25-30 billion of forex reserves, depending on market price. But the turnaround, if sustained, could go a long way in reducing India's dependence on imported coal and check forex outflows.

But a resurgent CIL has

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