State-run miner Coal India (CIL) has placed orders worth Rs 2,900 crore with a Belarus-based mining equipment manufacturing company for 96 dumpers to speed up production in its coalfields.
The 240-tonne dumpers to be supplied by Belaz, the firm which bagged the contract through a global tender process, will be used in the Gevra and Kusmunda mines in CIL subsidiary South Eastern Coalfields’ area.
The order value of the dumpers is nearly a third of CIL’s Rs 10,000-crore provisional capex target set for the ongoing fiscal. The miner spent Rs 844 crore as capex in Q1 and company sources said the Q2 figure will be more than the preceding quarter.
With reduced domestic demand of coal, CIL has currently shifted its focus to overburden removal — the process of removing the top soil and rock to expose coal seams in its open cast mines — which will enable it to accelerate production and supply the fuel at short notice. Dumpers are primarily used in open-cast mines and aid in the transport of over-burden.
CIL produces about 83% of the fuel in the country, and with falling power demand, the company’s production decreased 0.8% annually to 602.1 million tonne (MT) in FY20, recording the first annual decrease in at least 20 years.
All-India coal production had inched up 0.05% in FY20, the lowest growth rate in at least 20 years, to 729.1 MT.
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, as the coronavirus crisis has kept power demand muted. Coal companies have to moderate production according to offtake, as coal cannot be stockpiled beyond a certain quantity without the risk of catching fire.