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Coal India Ltd (CIL) has revised its production target downwards for FY21 to 650-660 million tonne (mt), against the earlier estimated production of 710 mt, in the wake of Covid-19 induced disruptions.
According to Pramod Agrawal, Chairman and Managing Director, CIL, the demand has been “subdued” since the beginning of this fiscal and this has impacted coal offtake. However, demand has started picking up from the last week of July and has improved further in August.
“Covid-19 has adversely affected demand. However, now we see demand is returning and expect it will improve further now onwards. Given the situation, we are hopeful to end the year with 650-660 mt of production,” Agrawal said at an e-session organised by Bharat Chamber of Commerce on Saturday.
For FY-20, the company had been able to achieve 91 per cent of its targeted production of 660 mt. CIL closed the fiscal year 2019-20 with an annual coal production of 602.14 mt, which is even marginally lower than 606.89 mt of coal it had produced in FY-19.
Coal demand was down by nearly 16-17 per cent during the first half of this fiscal as compared to same period last year. However, in the first few days of August, the miner has witnessed 13-14 per cent growth in offtake over same period last year. Coal offtake is expected to improve further in September, he said.
CIL has a pithead stock of around 70 mt this year, as against a stock of 30 mt same period last year and hence was very comfortable to cater to any increase in demand moving forward.
Import substitution
The country currently imports close to 240 mt of coal. Agrawal said Coal India was trying to push high grade coal from select subsidiaries to the coastal consumers. It is targeting import substitution to the tune of 70-80 mt in the south and western part of the country.
The company had recently introduced a special spot e-auction scheme for coal importers. The move would help step up sales and reduce India’s dependence on imports, it said.
In contrast to expectations that commercial mining may hurt interests of Coal India, Agrawal feels it will help introduce “a market linked price mechanism” and this would only benefit CIL as its “regulated” price would be far cheaper.
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