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Informist, Friday, Mar. 27, 2026

 

By Avishek Rakshit

 

KOLKATA - Coal India Ltd., which had set a coal production target of 875 million tonnes for the current financial year, is likely to miss the target by a wide margin, with final output seen at 760 million tonnes to 770 million tonnes, a company official told Informist. This is primarily due to the large unsold stockpile at its mines, which is constraining output.

 

The world's largest coal miner produced nearly 684 million tonnes of coal in Apr-Feb, down about 2% from a year ago. Its sales volume fell by around 3% on year to around 675 million tonnes in Apr-Feb.

 

"Currently, we are producing around 2.7-2.8 million tonnes of coal every day. At this run rate, we will be able to achieve a production of around 86 million tonnes during March," the company official said. "Sales are steady at the moment, but may pick up in the coming months."

 

The company official said that Coal India currently has around 129 million tonnes of stock at its pithead mines, which is likely to rise to 131 million tonnes by the coming financial year. This is around 100 million tonnes more stock than Coal India considers the normative level. The stock, according to the company official, is a major hindrance towards the Maharatana company's ability to scale up production to meet its annual target.

 

Pithead stocks are unsold coal extracted by miners and kept at the mine. Not only does an inventory overhang at the pitheads disrupt and constrain Coal India's production and sales plans, but it is also hazardous and can cause accidents such as fires. Accumulation of coal stocks in the mines leads to congestion around the mine area, and Coal India finds it difficult to blast new coal seams and increase production.

 

Coal India had started the current financial year with a huge stockpile of over 80 million tonnes and was unable to clear the stock despite offering steep discounts.

 

"Sales have been muted for some time now, as there is enough coal in the ecosystem. Power plants have around 58 million tonnes of stock, and another 3-4 million tonnes of coal are always on the move. This led to inventory build-up and bottlenecking the mines, which limits our ability to dig up coal," the official said.

 

However, with gas-based power generation under stress due to supply constraints, Coal India officials are hopeful that coal demand will increase in the summer, when power demand usually picks up.

 

State-owned power producer NTPC Ltd. is Coal India's largest customer, accounting for around 68% of its total annual sales. Although majorly focused on coal-based thermal power generation, NTPC also produces power from gas. Its gas-based portfolio includes seven operational stations with a total installed capacity of over 4,000 MW, largely located in Gujarat and Uttar Pradesh.

 

For FY27, Coal India has set an ambitious production target of 1 billion tonne, which may be a Herculean task for the miner to achieve given the current production levels. Terming production and sales mandates as "aspirational", Coal India officials said that production targets are set after considering the requirements of power plants and hence, any change in the requirements of power plants affects Coal India's plans as well.

 

"Think of the stockpile as a situation that will ensure that coal can be supplied to power plants in increased quantity if there is a sudden pent-up demand. It will help us avoid any coal shortage in the country if it pops up," the official said.

 

To clear the inventory in the next financial year, Coal India officials have already begun talks with private power plants to replace imported thermal coal with coal produced by Coal India. The company is targeting import substitution of 175-200 million tonnes.

 

Friday, shares of Coal India closed 0.3% higher at INR 445.05 on the National Stock Exchange. End

 

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

 

Edited by Saji George Titus

 

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