Coal news and updates

Tardy offtake meant big inventories and some mines had to regulate production

Coal India Ltd. seems set to close the fiscal year with production of about 540 million tonnes, against an output target of 550 million tonnes, according to an industry official. That would mark a growth of almost nine per cent over the previous fiscal and a 46 million tonnes increase in absolute terms.

CIL produced 494 million tonnes in 2014-15 against the 520 million tonnes set for that year.

Indications are that output will top 530 million tonnes, with the level till March 27 at about 527 million tonnes, according to the official, who did not wish to be identified.

While CIL has been tasked to produce one billion tonnes of coal by 2020, tardy offtake has led to a high level of inventories, forcing some collieries to ‘regulate’ production.

In a clarification issued to stock exchanges earlier this month, CIL said that due to regulated lifting by power houses, coal stock had increased in some mines, due to which CIL had regulated production. Besides creating stock management problems, high coal inventories affect quality of the fossil fuel, and also pose fire hazards. CIL may be closing 2015-16 with a stock of more than 55 million tonnes, which would be the highest in recent times. It has carried high stocks in the past, but that was mainly due to non-availability of railway rakes.

It was learnt that this fiscal’s production shortfall was mainly due to delayed handover of forest clearances in Jagannath and Bharatpur, two large mines in the Talcher area of Mahanadi Coalfields Ltd based in Sambalpur, Odisha. Rehabilitation and resettlement problems hobbled production in two other MCL mines — Hingula and Kanhaiya.

These are all brownfield expansion projects. As such MCL which was set to produce 150 million tonnes in 2015-16 may end up with a shortfall of almost 10 per cent.

Problems over shifting of villages in Rajmahal area of Eastern Coalfields Ltd too affected output.

Source: The Hindu