While the central government-owned Coal India (CIL) has crossed a record 500 million tonnes (mt) of output for the financial year (though well below the target), with another fortnight to go, it is again stuck with a problem of inventory — a 53 mt stockpile as of Monday, up from 47 mt on March 1.
It had begun 2015-16 with 54 mt of stock and this had reduced over the September quarter but started climbing again from the December quarter, when low demand set in. As of February, it had missed its production target of 491.3 mt by three per cent, though there was 9.2 per cent growth in output (April-February) from the same timeframe in 2014-15.
It had aimed to cross 500 mt production in FY15 but reached only 494.2 mt. This year, the coal ministry raised the target to 550 mt from the former 507 mt, prompting the company to step up mine-level supervision and implement better evacuation techniques. Its (railway) rake loading saw 9.6 per cent growth, at 210.9 rakes a day against FY15’s average of 192.5.
The largest stock is with South Eastern Coalfields and Mahanadi Coalfields. Demand from Gujarat and Rajasthan power plants, in particular, had fallen substantially of late.
Taking into account the stock with power plants, the total available stock in India is about 88 mt, nearly 63 per cent higher than the 54 mt on April 1, 2015, when this financial year began. If enough sales don’t take place by the time the monsoons set in, it could lead to a price revision.
While the company is likely to miss its production target by at least 10 mt in FY16, its officials expecting the ministry to give it one of 590-610 mt for 2016-17. As part of its vision of a billion tonnes of production by 2020, the ministry has been pressing for more output, to reduce dependence on imports.