Coal India targets 12% production growth in FY23 amid power crunch

National miner Coal India (CIL) is eyeing 12 per cent growth in its production during the current financial year as it opens new mines to tackle the incremental demand for coal from the power sector.

The firm said it has received environmental clearance for 20 proposals, which shall add an incremental capacity of 22 million tonne per year (mty). Additionally, 36 mining projects have been cleared by CIL with a sanctioned capacity of 333 mt and an incremental capacity of 220 mt.

Senior executives said these new projects would add substantially to production growth in the future. As heatwave gripped the nation from March onwards, power demand touched record highs. This led to a coal demand-supply mismatch and CIL found itself at the receiving end.

The company, however, claimed that it touched a record high coal production during April. Government data indicated that CIL recorded the highest monthly coal production of 53.47 mt in April 2022, registering growth of 27.64 per cent over last year’s corresponding period.        

Until May, so far, CIL production is at 26.35 mt, 34.44 per cent more than the production during the same period last year. Total dispatches of coal from CIL went up to 57.50 mt in April 2022, from 54.23 mt in April 2021, indicating an increase of 6.03 per cent, said a government statement.

CIL’s production target for the ongoing financial is 700 mt, with the power sector getting a share of more than 500 mt.

CIL executives said to push coal production, the company has approved 16 coal mining projects, of which seven are greenfield projects and nine are expansion projects. Total capacity of these projects is 100 mty and incremental capacity is around 27 mty.

Coal India had earlier identified 15 projects, which would be awarded to private ‘mining development operator (MDO)’. The projects have a cumulative capacity of 170 mty. An executive said the company has issued work orders for five projects with 96 mty capacity.

The company is also planning to offer unutilised mines that are mostly underground for private investment via the MDO mode, Business Standard had reported. The company said it has identified 20 such mines. For improving coal loading and despatch, CIL is setting up coal handling plants and silos at 35 of its projects. According to the company’s estimates, this additional infrastructure can handle 415 mt by FY25.