New mines, better efficiency raise coal production in April

Commissioning of new projects and better mining efficiency pushed up the coal sector’s growth in April to 13 per cent, compared with 10.4 per cent growth in the same month last year, according to the Index of Industrial Production (IIP) figures released on Tuesday.

The sector carries a weight of 3.2 per cent in the IIP.

This, according to experts, led to higher output at thermal power stations. Electricity generation, which has a weight of 10 per cent in the IIP, registered 6 per cent growth in April 2009, compared with 1.4 per cent in April last year. About 75 per cent of the country’s coal production is used to fire power plants.

“We have been able to procure land for some new mines. The output has increased due to these new mines,” said a senior official from Coal India Ltd (CIL), India’s largest coal producer.

India’s total production in April this year — 39.6 million tonnes — was 4.6 million tonnes higher than in the same month last year. For the financial year ended March 2009, the production grew 7.7 per cent, compared with 6.3 per cent growth in the previous year.

Higher production is also a result of improved mining efficiency. “The time taken for physical measurement of coal stocks at mines was reduced to seven days in April from 45 days earlier. Mine officials are able to concentrate better on production activities,” said CIL Chairman Partha Bhattacharyya.

State-owned CIL, along with its seven subsidiaries, accounts for a major chunk of the country’s overall coal production.

“Our own production in April this year was 12.2 per cent higher than in April last year,” said Bhattacharyya. For April and May together, CIL’s production rose over 10 per cent.

According to Bhattacharyya, another major factor that has given a boost to production at the mines is the capital investment made by the company. “We invested in replacement of mine equipment last year, which yielded results in April,” he said.

Experts believe the spurt in the sector’s growth is likely to continue as demand for the dry fuel, especially from sectors like power, is not likely to dip in the long term.

“New mines are coming up and existing ones are being stretched to their limits as demand for electricity has not come down even in the current slowdown,” said Dipesh Dipu, principal consultant, PricewaterhouseCoopers. “Coal and electricity are the sectors where we expect a revival.”