Coal India dispatches fall for second straight month in January

While power plants across the country are set to step up generation in view of the surge in electricity demand due to the upcoming general elections, dispatches of coal from the mines of Coal India (CIL) has fallen for the second straight month in January. The state-owned behemoth supplied 52.8 MT and 52.4 MT of the fuel in December and January, recording annual declines of 1.2 percent and 2.3 percent , respectively.

CIL’s production levels have also been dismal with 57.2 MT in January, just 0.9 percent higher than the preceding month. In fact, production in December too had fallen by 0.9 percent to 54.1 MT. Production and dispatch rates saw the steepest falls at the coal mines of Bharat Coking Coal, Mahanadi Coalfields (MCL) and South Eastern Coalfields (SECL).

“Going ahead, if the issues at SECL and MCL are not sorted, CIL’s shipment growth could end up below 5percent in FY19,” analysts at Edelweiss Securities cautioned.

The last quarter of a fiscal year is usually the time when coal production peaks. Coal ministry officials had earlier told FE that they were banking on an increase in CIL output to replace the incremental imports. Power plants across the country had imported 5.5 MT of coal in December 2018, about 15 percent higher than what was imported in the same month in 2017.

CIL has supplied 407 MT coal to power sector during current fiscal till February 4, 2019, recording an increase of 7.3 percent. The average rake-loading of the power sector stands at 252.5 rakes/day, 13 than the same period of last year. Supply is likely to improve after the reopening of the Dhanbad-Chandrapura railway line which ferries the fuel in the coal-bearing areas in eastern India, the government said.

As on Monday, power plants had 20.9 MT (42percent up annually) coal stock with them, sufficient to last for 13 days. However, the power industry remain anxious about power demand surging as the winter season fades out.

State-owned power generator NTPC plans to double its coal import target in FY20 (from 5 MT in FY19) to meet the incremental demand from upcoming power plants worth 4 GW capacity. The company has awarded Adani group 2.5 MT tender for importing coal. Another tender for 2.5 MT import tender has already been issued.

Coal India Ltd