Coal India may resume supplies to non-power firms soon

17-Sep-2018

Coal shortage woes of non-power sector are likely to continue till about the end of September, Coal India Ltd (CIL) has indicated.

A surge in power demand towards the beginning of summer had forced the coal behemoth to start diverting supplies from cement, aluminium and other sectors. This strategy would be reversed only towards the middle of this month when the supplies are expected to improve, Coal India chairman Anil Kumar Jha said.

“During the first quarter, we produced 12% more over the previous year. But because of factors like policy of the government to provide 24×7 supplies, power demand is also increasing exponentially and we are not being able to keep pace with it. Unfortunately, in August as well as this month, due to heavy rain, production further deteriorated. But we are hopeful that after the rains stop, likely after Viswakarma Puja (September 17), we would be able to catch up,” Jha said after the annual general meeting of the company.

“This year, we have kept an aspirational target of 652 million tonne and would ensure that not only the power but supplies to unregulated sectors where there is pending demand are raised. But as of now, power sector remains a priority,” he said.

In a bid to solve the supply crunch seen in April, the ministries of railways and coal had decided to divert most of the available rail wagons to power plants, triggering an adverse ripple effect on sectors like cement and aluminium and diversion of supplies has continued till now.

Ad-hoc orders for stopping the secured coal rakes for captive power plants, especially from Mahanadi Coalfields and South Eastern Coalfields (subsidiaries of Coal India) for diversion to power plants has created problems for the sector, Aluminium Association of India, had said in a recent note.

Cement makers like Birla Corp and Ambuja Cement have seen a rise in freight cost as they have to transport the coal via road on account of shortage of adequate availability of rakes. Similarly, input costs have been impacted due to the use of imported coal.

In FY18, Coal India produced 567.37 million tonne (mt), achieving 95% of its target of 600 million tonne for the year.

Supply to the power sector is estimated at 525 million tonne for the ongoing fiscal, as against 454 million tonne in 2017-18, marketing director S N Prasad said.

Within the next two years, about 100 million tonne capacity would get added with the commissioning of 11 blocks earlier allotted in Jharkhand and Odisha, Jha said.

This apart, work on four mining projects having an aggregate capacity of 24.60 million tonne has been approved by the CIL Board.

The near-monopoly miner needs to ramp up production fast as it has been gradually closing down its unviable, legacy underground mines. This year, Coal India is closing down or merging 53 underground mines.

“There are many small unviable and uneconomical mines which came to us following the nationalisation of the coal mining sector. While some are being closed or merged, we are also converting some into opencast mines,” he said.

Source: DNA