Coal India unit Western Coalfields sees 10% output rise in 2014-15

Will help keep a lid on costly imports of coal

Coal India unit Western Coalfields expects to raise output by 10% to 44 million tonne in the next fiscal year due to the use of more sophisticated machinery in its mines, the unit's chairman said on Tuesday.

Western Coalfield's first potential output increase in five years will help India keep a lid on costly imports of coal at a time its parent is struggling to boost production.

India is the world's third-largest importer of coal despite sitting on what British energy group BP Plc ranks as the fifth-largest reserve, mainly due to regulatory, environmental and land acquisition delays in starting new indigenous mines and expanding existing ones.

Western Coalfields has increased the use of loaders and dumpers in its underground mines, is using more of conveyor belts and has replaced hand-held drill machines by universal drill machines that need less human involvement, Chairman Dinesh Chandra Garg told Reuters by phone.

Garg said he could not predict which mine will help raise Western Coalfields' production in 2014/15 as it runs 82 mines, which accounted for about 9% of state-run Coal India's output of 366.6 million tonne in the April-January period.

Coal India contributes about 80% of the country's output but has been unable to meet growing demand.

As a result, India's coal imports rose 21% to 152 million tonne in 2013, with power producers buying most of them, data from research firm OreTeam showed. Shipments could touch 170 million tonne in 2014, it added.

India's coal production is targeted to rise 8% to 604 million tonne in 2013/14 and reach 795 million by 2016/17, Coal Minister Sriprakash Jaiswal said earlier this month. Actual output has frequently fallen short of targets.

The shortfall in India has helped top suppliers such as Indonesia, Australia, South Africa and the United States raise their exports manifold over the years.

Though Western Coalfields' production will rise next year, the fiscal year ending March 31 will see a fall of 5% to 40 million tonne, Garg said.

"The drop in production is because of heavy rains in our main operating state of Maharashtra (in western India). Rains were 200% higher than last year and that had flooded many of our mines," Garg added.