Including December, CIL has been able to produce more on a y-o-y basis only in three months in the ongoing fiscal.
After recording drop in production on an annual basis for five straight months since July, state-run Coal India’s (CIL) output in December was 7.2% up year-on-year (y-o-y) to 58 million tonnes (MT). Production by the world’s largest miner declined 5.8% annually to 388.4 MT in the first nine months of FY20, mainly due to excessive rains hampering mining operations during the monsoons.
Law and order issues in some major mines and several employee union strikes after the Cabinet’s February 2019 decision to ease mining norms for private companies also hampered CIL production.
Including December, CIL has been able to produce more on a y-o-y basis only in three months in the ongoing fiscal. In April-December, only three CIL subsidiaries — Eastern Coalfields, Northern Coalfields and Western Coalfields — have recorded positive growth in production. Bharat Coking Coal’s production has fallen 13.2% y-o-y in this period.
In the April-November period, the company’s supply to the power sector had also fallen 8.9% to 291.4 MT. However, power plants are currently stocked with coal which can last them for as many as 18 days. The fuel reserves had critically come down to ten days in the same period last year. Experts have attributed lower coal offtake by power plants to muted electricity demand amid economic slowdown.
Coal companies have to moderate production according to offtake, as coal cannot be stockpiled beyond a certain quantity without the risk of catching fire. In the April-October period, 39.9 MT of coal has been imported by the power sector for electricity generation, 17.6% higher than the same period last year. Out of this, 26.1 MT has been imported by power plants which were designed to run only on imported coal.