At the beginning of the fiscal, the company’s pithead stock was at 99 MT and stock reduction has been the highest ever -- not only for the first half of any fiscal but on yearly basis as well so far.
PSU miner, Coal India (CIL) has liquidated a whopping 57 million tonnes (MT) of its pithead stock during the first six months of the current fiscal directing the bulk to power utilities. At the beginning of the fiscal, the company’s pithead stock was at 99 MT and stock reduction has been the highest ever — not only for the first half of any fiscal but on yearly basis as well so far.
At present, CIL has a pithead stock of 42 MT. The increasing production is expected to create a stockpile that is likely to exceed 100 MTs by the fiscal end. The company produced 249.8 MTs during the first half, a growth of 5.8%. The production target for the entire year has been kept at 670 MT, achieving which will create an inventory, difficult to manage. The demand from the power sector has been rising to date but it would stabilise by October end with the company supplying 1.6 MT a day, raising from its present supply level of 1.4 MT a day.
In fact, during the first half of this fiscal CIL’s off-take to the power sector at nearly 246 MT was the highest ever so far for this period but the demand from this sector was even higher for a sudden increase in coal-based generation.
“The company is responsive to the importance of improving coal stocks at thermal power stations. We are rallying our efforts to restore normalcy as early as possible… ” said S N Tiwary, director marketing, CIL.
There was an additional supply burden of around 10-12 MT on CIL to cater to domestic coal-based power plants. The coastal power plants that run on imported coal curtailed generation and thus plants running on domestic coal had to increase generation.
Power utilities generally build up coal inventories during the first quarter but the extra stocking didn’t happen and the extended monsoon compounded the woes interrupting production and supplies. The sudden escalation of domestic coal-based power generation happened from the second week of August leading to an insatiable appetite for coal.
Despite heavy rainfall, CIL produced close to 126 MT during the second quarter, yet a record high for any second quarter, posting 9.6% year-on-year (y-o-y) growth. Last fiscal’s second-quarter output was 115 MT. The state-miner, during the second quarter, supplied 117.6 MT to power utilities and total offtake shot up to 147.3MT, a 12.3% and 9.7% y-o-y growth respectively. The growth for supplies to the power sector is even higher at 17.2% when compared to 100.3 MT of supplies during the Covid free second quarter of FY-20.