Coal output by state-run miner Coal India (CIL), which produces about 83% of the fuel in the country, fell 3% year-on-year (y-o-y) to 36.4 million tonne (MT) in July, marking an improvement from the production levels recorded in the preceding three months.
The 158.4 MT coal output by CIL in the first four months of FY21 is 9.7% lower than the corresponding period last year. Signalling the resurgence of demand from the power sector, CIL said production in the last week of July was 15.7% more than the output in the corresponding period last year. Electricity demand in July was down 2.6% year-on-year, which is a sharp improvement from June when the annual drop in demand was 11%.
With reduced domestic demand of coal, CIL had shifted its focus to overburden removal — the process of removing the top soil and rock to expose coal seams in its open cast mines — with the company removing 88.5 million cubic metres of over-burden in July, 23% more than a year-ago period. This will enable CIL to accelerate coal production whenever the demand picks up and supply the fuel at short notice.
Coal companies have to moderate production according to offtake, as coal cannot be stockpiled beyond a certain quantity without the risk of catching fire.
CIL’s production decreased 0.8% y-o-y to 602.1 MT in FY20, mainly due to excessive rainfall hampering mining operations during the monsoon earlier this financial year, coupled with law and order disturbances in some major mines, and several employee union strikes. All-India coal production had inched up 0.05% in FY20, the lowest growth rate in at least 20 years, to 729.1 MT.