Coal India bucks trend, reports 0.8% annual decline in output in FY20

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Published: April 2, 2020 1:10:47 AM

Data reviewed by FE shows that the coal behemoth hasn't reported a decline in production at least over the last 15 years.

About 80% of the country's coal output comes from CIL mines.About 80% of the country’s coal output comes from CIL mines.

Bucking the upward trend of several years, Coal India’s (CIL’s) output declined 0.8% annually to 602.1 million tonne (MT) in FY20, mainly due to excessive rainfall hampering mining operations during the monsoon earlier this financial year (see chart).

Data reviewed by FE shows that the coal behemoth hasn’t reported a decline in production at least over the last 15 years. About 80% of the country’s coal output comes from CIL mines.

Law and order disturbances in some major mines, and several employee union strikes following the Union Cabinet’s February 2019 decision to ease mining norms for private companies also hit the world’s largest miner’s output.

The drop in CIL production in the fiscal year would have been much lower had it not recorded a 9.9% annual rise in the final three months’ output. The coal production scenario has improved, at least, from the November 2019-levels when CIL output was lower by 7.8% year-on-year (y-o-y).

Production in its Northern Coalfields and Western Coalfields subsidiaries increased 6.5% and 8.4% y-o-y, respectively, in FY20. “CIL, as a whole, produced 120.3 MT more coal in H2 than it did in H1,” said a company official. CIL’s supply to its customers, including the power sector, fell 4.3% annually to 581.7 MT in FY20. “Not a single coal- fired power plant in the country is in critical or super-critical condition for want of coal on March 31 2020,” the company said, adding, “many of the thermal plants have requested CIL to regulate coal supplies to them”.

Owing to the current lower power demand scenario, thermal power plants are flush with coal stocks with 44.7 MT sufficient for 28 days. Coal is mainly used in power generation and in April-January FY20, the country imported 58.1 MT of thermal coal for producing electricity — 15.7% higher than the same period in FY19. Coal imports by power plants have increased even as total coal consumption for electricity generation dipped 1.4% to less than 520 MT in April-January due to lower power demand stemming from economic slowdown.

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