As coal demand exceeds supply, govt plans to allot 10 mines to CIL in 2019

With the coal demand from power sector exceeding the supply in 2018, the government is hopeful of higher output in the new year from already allocated mines and plans to further allot 10 mines to state-run behemoth Coal India Ltd (CIL) in 2019.

Of the 85 mines already allotted, 23 have already started production and the Coal Ministry expects 20 more mines to begin production in the current financial year ending March 2019 or early in the next fiscal.

"This will increase our production substantially... This will also address additional coal demand from power sector," Coal Joint Secretary Ashish Upadhyaya told PTI.

Moreover, the government also plans to allot 10 mines to CIL in 2019, he said. This would be in addition to 10 mines allotted to the PSU this year.

"Our aim is to make all subsidiaries (of CIL) 100 million tonnes plus units in the long term," he said.

Coal India accounts for over 80 per cent of domestic coal output.

Talking about the coal shortage in 2018, Upadhyaya said it has happened because of the power sector demand having gone up substantially and attempts were made to meet this challenge of increased demand consistently through the year.

He said the government was actually able to meet the coal demand, but fuel stocks available at the power houses at times went down to the level of 3-4 days.

"And the number of critical power houses had gone up to 33 in the month of May, but gradually it is coming down. Now it is around 10. And the stock available at the power houses has also gone up to approximately 10 days... We hope to improve it further," he said.

"Ideally it (coal stock) should be for 21 days, but let's see how demand fluctuates," the senior official said.

Over the years, the coal production generally picks up in the third and fourth quarters and this trend was seen in 2018 as well, he added.

"So production is going up. If the demand remains stable, then the stock will start picking up," Upadhyaya said.

He said the government is committed to make coal available as per the demand in 2019 and the target is for 10 per cent growth rate in the next fiscal.

The sector has seen production growth of around 8 per cent in 2018 till date, which is "quite good" in comparison to the trend of past two years, the official said.

"The momentum which is being seen this year will continue in the next year.....We will be able to do much better next year in terms of production. Ultimately, it is the availability of coal that matters and how much coal we produce and put in the system," he explained.

"If the demand from the power sector does not shoot up drastically, we will be able to manage. We will put more and more mines that has already being allocated ((into production) ," he said.

On challenges faced in 2018, Upadhyaya said there was also an issue regarding import substitution because of the rising prices of the dollar.

"The effort was to supply more and more from the domestic sector and so it had put more pressure on the coal sector to supply from our own resources. So it has been overall a mixed feeling of satisfaction of doing 8 per cent growth," he said.

On achievements of his ministry in 2018, he said a fresh round of captive coal auctions kick-started in October this year after a gap of about 15 months.

"In 2017-18 we didn't get good response. It (coal auctions) had to be postponed. But in October this year, we started the process of coal mines auction and the response so far has been good. We have been able to get enough interest. Our bid documents have been sold and hopefully we will do better," he said.

The government has permitted captive coal block owners to sell 25 per cent of their production in open market and provided some flexibility in coal output.

The coal ministry had in October invited tenders seeking bids for 18 captive coal blocks to non-power plants in Jharkhand, Madhya Pradesh, Maharashtra, West Bengal, Odisha and Chhattisgarh.

Due to a lull seen earlier, a high-power expert committee was constituted to look into the reasons and they opined that there were some tough efficiency parameters and also suggested "some sweetener" in form of some portion of the coal being sold in the open market.

Upadhyaya said both the recommendations were being accepted.

In June this year, the AAP government in Delhi had written to Union Power Minister R K Singh that the national capital was staring at a power blackout due to the fast depleting coal stock at power plants in the city.

Delhi Power Minister Satyendar Jain had earlier also said that some thermal power generation stations were facing "acute coal shortage" for many days due to non-availability of transportation rakes.

Citing acute shortage of coal in thermal power plants in Karnataka, Chief Minister H D Kumaraswamy had also urged Coal Minister Piyush Goyal to ensure adequate supply to the state.