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Informist, Friday, Dec. 27, 2024

 

--Coal India official: May miss production target for FY25 by 3.0-3.5%
--Coal India official: See FY25 coal output 810 mln tn vs 838-mln-tn target
--Coal India official: Poor demand, high stocks at mines affecting output

 

By Avishek Rakshit

 

KOLKATA – Coal India Ltd. could miss its production target of 838 million tonnes for the ongoing financial year by 3.0-3.5% due to poor demand and congestion from pithead coal stocks piling up at its mines, a senior company official told Informist.

 

Against the aforesaid production and sales target set by the coal ministry, Coal India may end up producing 810 million tonnes in 2024-25 (Apr-Mar), but sales could be marginally better than the expected production, the official said.

 

"Demand condition is not good now, and we anticipate some demand recovery in the next few months. But that will not be enough to clear our (pithead) stocks. On top of that, if production rises continuously, then we may find ourselves in a tight spot going forward," the company official said. "Nevertheless, we will leave no stone unturned to move closer to our production target."

 

During Apr-Nov, Coal India produced 471 million tonnes, or 56.2% of its production target set by the coal ministry. With only four months of the current fiscal year left, achieveing a further production of 367 million tonnes of coal in this period could be a herculean task for Coal India.

 

To achieve the target, Coal India needs to mine over 3 million tonnes of coal each day, compared to the current production level of 2.3 million tonnes per day. Coal India, which is the world's largest coal producer, usually increases its output substantially in March to meet its target for the financial year. 

 

In March 2024, Coal India's daily production touched nearly 2.9 million tonnes – the highest in any month in any financial year, as it tried to meet its production target of 780 million tonnes for FY24. Eventually, the company ended up producing 773.6 million tonnes, and missed its target marginally. 

 

"It is true that production picks up in the winters, and we may rush our resources to reach high production levels like last year (March 2024), but then there has to be demand as well," the official said.

 

Coal India's sales during Apr-Nov increased by a nominal 1.5% on year to 492.6 million tonnes, which is "far less" than the projection made by the Maharatna company in April. The company sells coal primarily to the power sector, which accounts for 80% of its annual production, followed by the steel, cement, and ferro-alloys sectors. 

 

In November, coal-based thermal power generation, which forms the backbone of India's electricity generation infrastructure, rose only 0.5% on year to 104.17 billion kilowatt-hour. The coal stocks lying with the power plants, which are essentially unused by the plants, also rose to 43.8 million tonnes as of Dec. 24, from 38.7 million tonnes a month ago. 

 

Meanwhile, Coal India's pithead stocks increased as well and are now at 70 million tonnes from around 67 million tonnes a month ago as the miner has found it challenging to sell its stocks given the muted demand. 

 

"We have taken various steps like easing coal purchase and removing any cap on sales both for the regulated and non-regulated sectors. Thus, we expect that sales could improve in the coming months. Soon, we are going to analyse the efficacy of the measures we took to increase sales and ease coal availability for consumers," the company official said. 

 

On Friday, shares of Coal India ended 1.6% lower at INR 380.55 on the National Stock Exchange.  End
 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Tanima Banerjee

 

 

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