Coal news and updates

Strike and delay in EC clearance may force CIL to miss FY15 targets

February 09: Coal India Ltd (CIL) may miss its production and off-take targets for 2014-15 by around 17 million tons (mt) and 25 mt respectively due to multiple factors, a company official told ICMW.

The company has a production target of 507 mt for the year while its off-take target is 520 mt.

“Lower than planned availability of rakes, restriction in movement of wagons due to fog in December 2014 and January 2015, production loss due to the two-day strike in January 2015 and delay in getting Environmental Clearances (EC) for some key projects have affected production and despatches to a great extent,” the official said.

The official pointed out that the company had not received clearance to expand production from Kusmunda mine of South Eastern Coalfields Ltd (SECL) to 25 mtpa from 18.5 mtpa and because of that no production from the mine is likely to come in February and March as already 18.5 mt coal has been mined from the project in 2014-15.

“We had applied for EC clearance for expansion of capacity at Kusmunda to 25 mtpa from 18.5 mtpa, but the EC clearance has not yet come (as of February 5, 2015),” the official said, adding, “We expect EC clearance for Belpahar project of MCL in next 2-3 days.”

The official said that the company might miss its production and off-take targets despite three of its subsidiaries producing more than target so far. “In fact, ECL production is almost as per target till now, whereas BCCL is facing some shortfall. CCL, on the other hand, is operating as per target,” he said.

“Till now (as of February 5), we have grown by 6% year-on-year (y-o-y) so far as production is concerned, but the off-take grew by only around 3.2%. The targets look difficult to achieve at this point in time,” the official said, adding, “However, we are trying our best.”

He further pointed out that the two-day strike by workers in January 2015 had derailed their plans to a great extent. In addition, there was less availability of rakes and also there emerged natural restrictions in loadings due to fog in many parts of the country which had restricted the movement of wagons.

“There was controlled movement of rakes in December and January due to fog and as such delivery was restricted to a great extent,” the official added.

“Till now (as of February 5), we have produced about 396 mt coal. We have 53 days left, but there is a holiday on account of Holi Festival and that will impact production. We assume that CIL will somehow reach a production level of 490 mt in 2014-15 and the growth in off-take may be to the tune of 3.5% or about 500 mt, against 472.00 mt of off-take achieved in 2013-14,” the official felt.

He said that between April 1, 2014 and February 5, 2015, the company had received an average of 190 rakes per day as against 187 rakes received per day during the corresponding period of 2013-14.

“Although the availability of rakes in February is slightly better at 217-218, it is still less than the target of 220 rakes per day. There are, however, issues related with loading, which is quite normal as there are some occasional faults from our side as well,” the official added.