Increase in coal production helped lower power price: Western Coalfields

Western Coalfields has increased the production of coal to 57.6 mn tonnes in fiscal year 2019-20 and provided it cheaply to govt and private thermal power stations in Central, West and South India

Western Coalfields Limited (WCL) has increased the production of coal to 57.6 million tonnes in fiscal year 2019-20 and provided it cheaply to government and private thermal power stations in Central, West and South India. The move has helped thermal power producers to reduce the rates of electricity supply to consumers, said WCL on Tuesday.

WCL is a subsidiary of Coal India Limited (CIL). In 2013-14, its coal production dropped to 39 million tonnes. Because of this, some of WCL's biggest customers like Maharashtra State Power Generation Co Ltd. (MAHAGENCO), Madhya Pradesh Power Generating Co. Ltd. (MPPGCL), Gujarat State Electricity Corporation Limited (GSECL) and Karnataka Power corporation limited (KPCL) along with some private companies, had to buy coal from CIL's other subsidiaries, like SECL, MCL and SCCL. But the longer distance led to higher transportation cost being added to production rates.

According to WCL, in the last five years, it has opened 20 mines with a capacity of 45.64 million tonnes. These mines produced 35.8 million tonnes of coal in fiscal 2019-20. As a result, the company's production increased to 57.6 million tonnes and it was able to meet the coal demands of its customers.

MAHAGENCO is one of the biggest consumers of WCL's coal, with 50% of it going to the said power generator. According to WCL, it supplied 17.60 million tonnes of coal to MAHAGENCO during the fiscal year 2013-14. It increased its supply to 27 million tonnes in the fiscal year 2019-20. "Owing to the additional purchase coal from WCL, MAHAGENCO was able to save an average of Rs 1,200 per ton in freight/rental," said WCL in a statement.

In order to make more coal available to energy consumers, WCL has also identified 11 mines as "mine specific sources" dedicated to the power sector.

WCL plans to increase production from the current 57.6 million tonnes to 75 million tonnes by the fiscal year 2023-24 and 100 million tonnes in 2027-28.