Coal India subsidiary Mahanadi Coalfields Limited (MCL) has decided to lift the curtailment in coal supply for the non-power sector which had been implemented in order to address the supply concerns of thermal power plants.
The miner has informed that coal allotment to the non-power sector would be against 100% of the monthly scheduled quantity (MSQ) earmarked under fuel supply agreements (FSAs) during December, 2022.
The non-power sector is largely made up of sponge iron, cement, captive power plants, fertilizers, steel and other end-user industries.
This comes after the non-power customers were provided coal against this facility at trigger level which indicates minimum supply commitment. The provision was kept in place for a period extending back to February, 2022 till November, 2022.
In particular, these customers were allocated coal at 75% of MSQ during the October-November period.
Coal supply to non-power sector plunges 22%
CIL’s coal dispatches to the non-power sector decreased 22% y-o-y to 64.47 million tonnes (mnt) during April-November, 2022 as against 82.16 mnt in April-November, 2021.
On the other hand, supplies to the power sector, comprising thermal plants that provide electricity to the grid, jumped 12% y-o-y to 380.58 mnt.
The disparity in coal supply was mainly due to robust power demand driven by intense heat-waves in summers. Besides, higher supplies were necessitated in order to maintain adequate inventory at the power plants which had fallen to alarming levels.
However, with the onset of winter, the generation schedule for power plants has gradually eased. At the same time, build-up of adequate inventory level has further lowered the demand for coal.
In addition, improvement in mining activities after an extended spell of incessant rains has provided the miners a leeway to scale up their supplies to the non-power sector.
MCL, in particular, seems to be benefiting the most as it has been the top performer among the CIL subsidiaries.
During April-November, 2022 the company had recorded coal production and dispatches of 120.05 mnt and 126.62 mnt, respectively. In both these aspects, it has attained the set target while registering a double-digit growth y-o-y.
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