Coal India steps up logistics to ease short-term shortages

27 November 2017

Faced with dips in production growth and dwindling stocks to bank on, Coal India Limited (CIL) is hoping that a beefed up logistics and distribution solution will ease the clamour for dry fuel among various end-user industries.

The miner reckons that increasing volumes transported by road and higher daily loading of railway rakes will be a short-term solution to users facing coal shortages, as CIL officials acknowledged that increasing production in the short term was not feasible.

Official figures state that CIL produced 278-million tons between April and October 2017, falling 5% short of a target set by the government, while sales were recorded at 317-million tons, 3% lower than the target.

Higher sales were largely achieved through drawing down 40-million tons of an estimated 68-million tons of pithead stocks that the miner was carrying at the beginning of the year.

Last week, CIL, with support from government-owned and -operated Indian Railways, was able to load 250 railway rakes on a single day and the miner was in talks with the railway authorities to step up average daily rake loading to 266 for the remaining months of the current financial year, up from an average of 216 rakes a day loaded previously.

CIL officials said that in the medium term, the target would be to load an average of 300 rakes a day and the railway authorities have been asked to make the necessary number of rakes available at the mines.

In further relaxation of supply agreements with thermal power companies, CIL has communicated that thermal power companies, after having exhausted their yearly off-ake quota of coal, would be free to lift any volume of coal directly from the mines, proved the consumer transported it by road to the plant sites.

The re-jig in the distribution logistics would help CIL to ensure higher availability of coal, largely through liquidation of the existing pithead stocks of 28-million tons and partially through boosting production growth, at least in the short term, officials said.

The Indian Captive Power Producers’ Association in a communication to CIL has claimed a severe shortage of coal and that captive thermal power plants were able to secure only 15% to 50% of supplies against linkages.

It suggested that port-based thermal power plants be directed to source their fuels through imports, which would make more volumes available to inland thermal power plants and ease congestion on the railway network.

Source: Mining Weekly