Coal India faces uphill task

Calcutta: Coal India would have to step up its production to over 3 million tonnes (mt) per day in March to reach its annual production target of 600 mt for the fiscal, a steep hike from the target of 2 mt a day that coal and railways minister Piyush Goyal had stated in a written reply to the Rajya Sabha in January.

the eleven months of 2017-18 (April-February), the state owned miner has produced 495.09 mt recording a modest 1.4 per cent growth over the corresponding period previous year, but falling short of the target by 7 per cent.

Two of the eight subsidiaries of the miner - Bharat Coking Coal Limited and Central Coalfields Limited - have recorded a drop in production in the eleven-month period, having to manage high stocks. Any coal stock more than three months results in quality deterioration and accordingly, production has to be managed such that inventory is controlled.

The public sector miner has been set a target of 600mt in this fiscal, and it has to produce 104.91mt in March itself, which according to industry sources could be an uphill task.

Coal India sources said production tends to pick up between January and March as power plants look to stock up on coal ahead of the summer season. Based on the current trend, the miner expects to surpass production of 66.07mt reached last March. But, even with the higher production, there would still be a shortfall.

Coal offtake in the eleven-month period was 525.09mt against a target of 541.6mt a year ago.

According to the proposed annual plan for 2018-19, the output target of Coal India has been kept at 630mt which is a 5 per cent growth over the target of 2017-18.

Coal India raised thermal coal prices across certain grades in January following a decision to impose an evacuation charge of Rs 50 per tonne. Both moves are expected to add around Rs 2,700 crore to the topline of the public sector miner.

Coal India Ltd