State-run miner Coal India Ltd (CIL) has ramped up its coal production in an effort to maintain adequate inventory levels for the summer season.
Scaling new highs, the company produced 2.57 mnt of coal on 10 Mar’22. As a result, the average output was lifted to 2.49 mnt/day in March, which is significantly higher than the level seen in the previous months.
Moreover, the current production exceeds the average dispatches recorded at 2.09 mnt/day for the month, by around 19%.
Focus on reducing supply-demand gap
There has been a substantial increase in coal demand on the back of an unprecedented rise in coal-based power generation. However, the miner was slow in raising its production volumes compared to the demand.
Evidently, the company has already registered its highest-ever coal dispatches in the ongoing fiscal (FY’22), by breaching the previous high of 608 mnt attained in FY’19. But production is still lagging behind.
As on 10 Mar’22, total dispatches have reached 620.83 mnt, up 8% y-o-y. On the other hand, production, marked at 567.3 mnt, was lesser by around 29 mnt compared to the year-ago levels.
Because of the variation, CIL’s coal inventory at the pit-head mines registered a steep decline this fiscal. At the end of Feb’22, the inventory level was assessed at 42.35 mnt, down 46% y-o-y compared to 77.75 mnt in Feb’21.
At the current rate, the company is set to attain its highest coal production with almost 21 days left before the fiscal-end. More importantly, the higher production would accelerate build-up of inventory levels required to cater to the elevated demand from the power sector in an effective manner.
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