Coal stocks at power plants across the country have declined to a point where they can meet the requirement for an average of only six days.

Close to 70 plants have enough stocks to see them out for just three days.

Coal stock indicates the slowing down of supply as the plants need to maintain a threshold of more than 20 days of their stipulated coal supply as reserve at their sites.

Coal India (CIL) reported 10% production growth and 15% off take growth y-o-y in September 17 due to the low base in FY17 as well as restocking of coal at power plants. With the recovery in off take growth in Aug-Sept’17 the 2Q17 off take growth is 14% which should reflect positively in earnings. Additionally, the YTD FY18 growth till Sept’17 now stands at 0.9% for production and 8 % for off take despite negative growth in 1Q18. Production growth is lower than off take as CIL is depleting its stocks estimated to be around 50mnT.

Coal India on Monday said it has stepped up supplies to support thermal power units, which were facing coal crunch. In August, the country had faced energy crunch with growth in hydro, nuclear and others sources declining 12%, 36% and 7%, respectively. The demand for electricity from thermal power plants went up substantially, which prompted an additional 17% generation compared to August 2016. CIL supported the thermal power stations by increasing coal supplies by 20% to 34.4 million tonne compared to 28.6 million tonne during August 2016.

Coal India has planned to enter the metallurgical mining sector and has narrowed down on iron, copper, bauxite and nickel as the primary metals.

While a blueprint is being worked out, Chairman Gopal Singh has said that metal mining won’t hamper the targeted coal production of one billion tonne by 2020.

Coal stocks in NTPC’s 13 (out of 22) power plants are at a critical level despite Coal India monitoring production, despatch and evacuation on a day-to-day basis to rush supply to the plants. NTPC’s director of finance Kulamani Biswal has said that stocks in these power plants were for less than three days, while the average stock of all the 22 plants was seven days.

“The stock should ideally be for 15 days but since CIL is producing less coal, the power plants are unable to build up their stock,” Biswal said on the sidelines of mjunction’s coal market conference.

State-owned Coal India will kick off the next round of coal auction aimed at the non-regulated sector, including those dealing in sponge iron, by this year- end or early 2018. The decision comes as a dozen power plants are staring at a bleak scenario for want of coal. “Of a little over 50 mt of coal earmarked for the ongoing fiscal for the non-regulated sector, including sponge iron, cement and CPPs (captive power plants), Coal India (CIL) will auction linkages of around 25 million tonnes (mt) either in December or January,” a senior government official said.

Coal India (CIL) has drawn up an emergency plan to regulate coal movement to the non-power sector for pushing additional coal to the thermal power plants. In the long run, it plans to redefine its priorities much on the lines of the governance practiced in Central Coalfields (CCL). Redefining priorities has helped in complete transformation of this CIL subsidiary, both in terms of physical and financial parameters.

Shares of the state-run coal mining company Coal India Ltd (CIL) advanced more than 2% on Monday after the PSU said that India is not facing any scarcity of coal and the output of Coal India is more than the country’s power demand. Coal India – largest producer of coal in the world had registered a high growth rate of 28% output in FY17 over the last fiscal, while the average rise in power demand in the country was at 10.3%, said Chairman and Managing Director Gopal Singh.

Coal India Ltd (CIL) on Friday said it is expecting to garner about Rs 527 crore of additional annual revenue with revisions in sizing, loading charges and additional charges for supply of slack and steam coal.

“Coal India Ltd in its 346th Board meeting held on August 31, 2017, approved the revision in sizing charges, rapid loading silo (RLS) charges, revision in additional charges for supply of slack and steam coal,” the miner said in a regulatory filing.

Coal India's expenses are likely to shoot up by Rs. 5,500-6,000 crore every year, as the company has conceded to a 20 per cent wage hike apart from other benefits. This in turn, is likely to pull down the company's projected profitability by a minimum of nine per cent.

Projecting a boost in coal demand, sector analysts had projected a Rs 11,000-13,000 net profit for Coal India for the entire year, however, post the wage revision, the same has been downgraded to range between Rs. 9,000-10,000 crore.

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