Coal news and updates

With Coal India Ltd's (CIL) output growing 8.5% to 536 million tonne (mt) during 2015-16, 42 mt more than the previous fiscal, country's imports have come down by more than a fourth to 15.54 mt from 21.42 mt a year ago, coal secretary Anil Swarup has said.

With CIL expected to mine coal at a faster rate in the current financial year, imports would fall more, said India Ratings in a research report on Wednesday.

"Given the increase in domestic coal output, imports into India will decline, which is likely to exert pressure on volumes of large coal importers. As we expect CIL output to increase by 10% in 2016-17, or nearly 54 mt or equivalent to 32 mt imported coal, the volume decline in imported coal could be higher," the ratings agency said.

Higher coal output was possible because of increased availability of railway rakes from 194 per day during 2014-15 to 212 during 2015-16, and acquisition of 5,549 hectares of land, Swarup claimed.

With domestic coal largely meeting need of most of the power plants, there might not be any big need for them to raise imports.

"Coal prices are already at its lowest in the last four years. They are not expected to move much from current levels," Siva Subramanian, associate director, India Ratings, told dna.

However, with landed cost of imported coal at the east coast almost at par with the landed cost of domestic coal, power plants would now increasingly substitute imported variety.

Country's largest power producer NTPC Ltd has reportedly decided not to import any coal this year.

Record coal production by CIL and off-take has resulted in unprecedented 28-day average inventory of coal at power plants.

"With higher availability of coal, many of the power plants which didn't have access to the domestically produced fuel would be able to operate on an optimal level," Subramanian said.

The other side of the story is that with poor demand of power, many of the power plants are now running at suboptimal level with plant load factor at a low 61-65%, said Subramanian.

The PLF was at a high 75% in fiscal 2011.