Union Minister of Coal, Mines and Parliamentary Affairs, Pralhad Joshi, has informed that India’s coal production will touch 900 million tonnes (mnt) in FY2022-23 (FY’23). Of this, state-run miner-Coal India Ltd (CIL) has been set a target of 700 mnt, while the remaining output would come from Singareni Collieries company (SCCL) and a mixed bag of small-scale captive and commercial miners.
In April-Septmeber 2022, country’s total production reached 382.02 mnt, up 21% y-o-y compared to 315.68 mnt in the year-ago period. To attain the production target, the country will have to produce 86 mnt on a monthly basis in the remaining six months (October-March) at an average rate of 2.88 mnt/day.
At present, combined production rate from CIL and SCCL has increased to 2 mnt/day in October against the average rate of 1.79 mnt/day recorded in April-September period.
This production trend suggests that the country would require to expedite operationalisation of new mines that have been allocated in auctions to attain this ambitious target. Notably, the captive and commercial miners have produced coal at an average rate of 0.29 mnt/day in April-September.
Factors impeding production
Led by the surge in power demand, coal companies have registered a remarkable growth in production this fiscal.
Leading from the front, CIL’s production scaled a new high, rising 20% y-o-y to 298.98 mnt during April-September compared to 249.81 mnt in the year-ago period. This is its highest-ever output at this juncture, with the previous high being recorded in FY’19.
In fact, barring a subdued performance from SCCL, whose production dropped 2% y-o-y to 29.23 mnt, output from captive and commercial mines increased 50% y-o-y to 53.81 mnt during April-September.
Nevertheless, slow development in opening of new mines was a major hinderance, at a time of seasonal slowdown owing to monsoons leading to lower production.
Under the commercial mining scheme, the government has auctioned a total of 64 mines over five tranches, but only two have been operationalised.
Besides, under-utilisation of existing mines has also emerged as a concern. For instance, NLC’s Talabira II/III mine has an annual capacity of 20 mnt of which 6.34 mnt was produced in FY’22. Similarly, NTPC’s Talaipalli mine had recorded output at 0.41 mnt against available capacity of 18 mnt.
The Coal Ministry has cancelled the allotment order of Marki Mangli-I coal mine this fiscal, which was already in operation amid delay in execution of statutory payments.
Outlook
Production is set to rise in the coming months in tandem with improvement in mining activity post monsoons, and it is likely that output would touch new highs this year. However, delays in project approvals would impact the opening of new mines and thereby curtail the growth pace.
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