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Coal India misses production target again; imports likely to increase

CIL's output between Apr 2017 and Feb 2018 stood at 495.09 mt, 7% lower than the 531.32 mt target set by the coal ministry. Similarly, sales volume is set to fall 3% short of the 541.60 mt target

Avishek Rakshit  |  Kolkata 

coal

The import of thermal is likely to increase in the coming months, as India is set to miss its production target again – for an 11th straight month save August and September – causing a fuel shortage at the country’s thermal power plants. This is particularly worrisome as the demand for is likely to increase further as summer approaches.

The monolith’s output from April 2017 to February 2018 stood at 495.09 mt, seven per cent lower than the 531.32 mt target set by the ministry. Similarly, sales volume during this period is set to fall three per cent short of the 541.60 mt target.

With less than a month left in the present financial year, the world’s largest miner looks set to miss its 600 mt annual target for 2017-18.

The situation in the power sector, on the other hand, continues to deteriorate. As on February 28, 2018, as many as 51 power plants were classified as critical or super critical, with the average stock standing at 10 days’ requirement, as against the prescribed norm of 22 days’.

A India official said that all plants classified as critical or super critical were non-pithead plants; that means these did not lie within the catchment area of the mines, so theyhad to be fed with either road or

According to sector experts, the primary constraint is non-availability and load time for railway rakes. A power sector official opined that the was loading nearly 250 rakes a day, even as the rake availability had now improved – the loading time needed to be improved. Also, there is the problem of bottlenecked railway tracks right from the pit-head to the plant, as well as congestion in the network.

To decongest the railway network, India had envisaged three critical corridors – Tori- Shivpur, Jharsuguda-Barpalli and Mand-Raigarh railway lines – but the progress hasn’t been satisfactory even for company officials.

“It’s not only a problem of insufficient production. After all, we have to send to the plants as well. In case there is a severe disparity in production and despatch volumes, pithead stocks will increase, and so will the risk of accidents, including fire,” a India official said.

Also, land acquisition problems, delays in clearances for opening of new mines, law-and-order problems especially at the mines of Central Coalfields and Mahanadi Coalfields, and excess rainfall in August and September also hampered production.

An analyst with Ratings said India could eventually address these concerns, but that would take time, so thermal plants might have to fall back on imported to meet in the coming summer season.

Coal India misses production target again; imports likely to increase

Every year, the demand for power, both from the industry and households and other commercial establishments, goes up substantially in summers.

According to data from the Directorate General of Commercial Intelligence and Statistics (DGCIS), coal, coke and briquettes imported by India during 2015-16 stood at 207 mt, leading to a forex outflow of $13.67 billion. In the previous financial year, imports had fallen to 195.4 mt but the forex outflow had increased sharply to $15.76 billion. This financial year (April-December), imports stood at 157 mt, resulting in a forex outflow of $16.3 billion.

“Given the situation at power plants and India’s production figures, imports might increase, especially for the coastal plants that can be fed directly by sea,” a market analyst said.

In the first three quarters of the current financial year, India had already imported 80 per cent of the volume it did in full 2016-17.

The analyst further said that 18.49 mt of would have been imported during January. This is 12.4 per cent higher than that in January 2017. Official data for the current calendar year is yet to be released by DGCIS.

Last month, World Association Chief Executive Benjamin Sporton had predicted higher imports by India in the 2018-19 financial year.

First Published: Wed, March 07 2018. 11:05 IST
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