India: CIL coal production rises by 7% y-o-y in Aug ’20

Coal India Ltd (CIL), country’s largest coal producer, has reported an uptick in production on the y-o-y basis for the first time in FY ’21, as the miner ramps-up output in line with the rise in coal consumption at the power plants.

Production increased 7% y-o-y to 37.17 mn t in Aug ’20 as against 34.77 mn t in Aug ’19, however, it was assessed slightly lower m-o-m from 37.37 mn t in Jul ’20.

Improvement in electricity demand has gradually enhanced coal intake of power producers which have witnessed a steady decline in inventories lately, thus compelling CIL to raise its production. Data provided by CEA indicates that coal stock at power plants has dropped 7% m-o-m to 37.87 mn t as on 30 Aug ’20 compared with 40.72 mn t noted on 30 Jul ’20.

The rise in production was majorly contributed from MCL and NCL, with the latter attaining its highest monthly production for the current fiscal.

Subsidiary-wise production:

Quantity in Million Tonnes
* Mining operations at NECL are temporarily suspended from 3 Jun ’20

Coal Dispatch:

In view of the excess stock, the miner has been supplying more coal volume to liquidate the surplus material. The progressive rise in dispatch was continued during Aug ’20, as it increased 2% m-o-m to 44.34 mn t, which was also recorded 10% higher on the year from 40.47 mn t in Aug ’19.

During the first five months of FY ’21, CIL’s coal dispatch of 208.36 mn t was assessed 7% higher than the production of 195.54 mn t coal in the same period, thereby helping it to liquidate around 13 mn t of the excess stock accumulated since Apr ’20.

Vendible coal stock at the end of Aug ’20 has been reduced to 62.73 mn t as against 75.92 mn t assessed in Apr ’20.

Outlook: With mining activities likely to remain affected due to the ongoing monsoons and graded restrictions to curb COVID-19, CIL is expected to augment its coal production from Oct ’20, which has fallen significantly from the levels attained in the previous fiscal.