Coal news and updates

Coal India output rises 10.5% in Q2

After a lacklustre first quarter, Coal India bounced back with 10.5 per cent growth in production to 98.5 million tonnes in July-September quarter against the same period last year. Supplies to consumer or offtake grew by 7.5 per cent to 109 mt.

Higher supplies than production resulted a drop in pithead stock to approximately 28 mt, according to company sources. CIL reported 0.4 per cent growth in production and two per cent growth in offtake during April-June 2013.
Tough job ahead

The improved second quarter performance, however, doesn’t leave much scope for complacency at CIL. The company had earlier set a goal to increase production by 28 mt to 482 mt (454 mt) in this fiscal.

According to the half-yearly data released to the stock market on October 1, CIL is six mt short of production target during April-September 2013.

This means the company has to mine l at the rate of about 1.6 mt a day for the remaining period of 2013-14 to reach the targeted production level. The coal major produced 117 mt in October-December 2012 at a daily average of 1.3 mt a day.
Pithead stock

Moreover, higher production in October-December may merely add on pithead inventory, as railways will be preoccupied in moving the harvested crop, thereby, limiting scope for evacuation of coal to power plants.

Company insiders agree that CIL may miss the production target for the year. However, they say lower production will not result in any supply shortfall as the gap will be bridged by diluting inventory.

“For years CIL went on accumulating inventory due to mismatch between production and evacuation. We have reserved the process since last fiscal, thereby diluting 14 mt of stock (from as high as 71 mt on March 31, 2012),” a source said.

Source: The Hindu Business Line