Coal India Ltd (CIL) is envisaging an 8.5 per cent growth in production at around 660 million tonnes (mt) in 2019-20, as per its MoU with the Coal Ministry.

However, it might well be an uphill task for the state-owned miner as it has recorded a near flat growth in the first two months of this fiscal.

CIL had registered 7 per cent growth in production at 606.89 mt in 2018-19, around 3 mt short of its planned target of 610 mt last fiscal. It had recorded a 15 per cent growth in production at 137 mt in the first quarter (April-June) of last fiscal, accounting for nearly 22 per cent of its total production last year.

However, this year, the production has been almost flat or even slightly negative in April and May, at around 92 mt. Though the state-owned miner is hopeful of covering the lost ground in June, it may not be good enough to make good the lower production in April and May, a CIL source told BusinessLine on conditions of anonymity.

Overburden removal

The first two quarters typically contribute to 40 per cent of CIL’s total production, while the remaining 60 per cent comes from the last two quarters. Of that, the fourth quarter plays a significant role in enhancing production.

The sluggishness in production growth in the first quarter was primarily on account of slowdown in overburden removal (OBR) due to delay in finalisation of contracts.

Overburden removal, which refers to the removal of topsoil to expose the coal seams and extract minerals, is an important process, particularly in coal mining in India, which is essentially opencast.

“Due to several contractual issues, the growth in overburden removal had slowed down last year. This impacted production in the first quarter,” the official said.

It is to be noted that over 90 per cent of Coal India’s production comes from opencast mines and therefore any slowdown in overburden removal affects production growth as new seams may not be exposed. However, the OBR contracts have been signed and things are “looking up” and production is expected to pick up in the coming months, he added.

Apart from the slowdown in overburden removal, the various subsidiaries of CIL, such as Mahanadi Coalfields (MCL), Central Coalfields (CCL) and Bharat Coking Coal Ltd (BCCL) have been plagued with law and order, land and weather-related issues, impacting production.

MCL, for instance, has been losing around six working hours every day since April 18 due to forced shutdown on account of extreme weather conditions. While CCL in Amrapali has a lot of coal available, evacuation has been an issue and BCCL has been confronted with law and order and encroachment issues, the official said.

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