CIL ready to handle any surge in power demand: Chairman

With sufficient domestic stock available with CIL to meet the power sector’s demand we do not foresee any crisis as such. The highly volatile nature of power demand makes it difficult to predict future scenario. But, we are geared up to handle any surge in demand with adequate stock at our pitheads and increased production. CIL’s production is set to grow, and is growing at 11 per cent whereas coal demand from CIL to power sector in the current fiscal is pegged to grow at 4 per cent over last year.

Our pithead stock at a little over 45 million tonne (mt) at August end is higher by 45 per cent or 14 mt versus same date of last year. Coal stock at domestic coal-based power plants, where the bulk of the supplies are met by CIL are around 28 mt. Further, a total inventory of about 11 mt is available for domestic coal based plants at goods sheds, private washeries, captive mines, and ports including rakes on rail. This makes a total of around 84 mt of coal available in the circuit. With increased output from CIL in the coming months, there is no cause for concern.

FSA prices were revised by a nominal 8 per cent for only high gross calorific value coal in G2 to G10 grades. These account for around 28 per cent of our total supplies. The remaining 72 per cent, majority of which goes to the power sector, remains unaffected by the revision. The impact on revenue due to 8 per cent revision would be a meagre 3.37 per cent for the remaining period of FY 2024. The primary reason for revisiting the prices of G2 to G10 grades was to make the mines producing this category of coal financially viable. As their reserves are deep seated in nature, the production cost spirals up due to removal of large quantities of over burden. This has to be offset. Whenever we take a call on revision in future, we will take stakeholders on board. Our aim is to protect our EBITDA and also shield the nation from the impact. However, our coal prices are not benchmarked against international prices.

The base of 703 mt over which we have to grow is high but we will give our best shot to achieve 780 mt output target this fiscal. So far, the production is at par with the required 11 per cent growth with which we began the fiscal in our chase of 780 mt. We are confident of reaching the target. What is assuring is the robust growth of 32 per cent in overburden removal that facilitates faster future production with the coal seams laid open. All our subsidiaries are ahead of last year’s production with most of them posting double digit growth. 

Of the 15 MDO projects having a combined targeted capacity of 170 MT per year, mining operations have begun in three projects - Siarmal OC, Ketki UG and Hura C OC – having combined capacity of 54 mt annually. This apart, work was awarded for eight projects of 68 mt per annum capacity. While the bid evaluation for one project is under progress, the rest three are being tendered. The role of MDOs would be to excavate, extract and deliver coal to CIL’s coal companies in accordance with the approved mining plan. MDOs would contribute for increased production in an economically viable manner.

Underground mining is environmentally clean, yields superior quality of coal, and avoids land and social issues. For these reasons, CIL is revisiting 34 abandoned UG mines under 3 tranches. The locked-up coal assets can now be unearthed through improved technologies. 20 such mines have been identified under the first tranche with 7 each in other two tranches. Notice inviting tender has been floated for 28 mines under three tranches. Letter of acceptance has been issued for 13 mines having 14.4 mt capacities per annum which will start contributing from FY2025 progressively.