The Government of India has mandated the state-run producer in the country Coal India to raise its production to 550 MnT in FY16.
CIL, one of the largest coal producers in country is seems on track to achieve its target for FY16. Coal production is expected to go up by 50 MnT in this fiscal as the Government has raised its production target to 550 MnT in FY16. Currently CIL is very concerned to achieve its target for FY16 as in the first half of the fiscal (H1) coal production reached around 229 MnT which seems realistic to touch 550 MnT till the end of FY16.
During FY15, CIL produced 494 MnT of coal, and that was up by 32 MnT than that in the preceding fiscal, but fallen behind the production target by 3%. Aiming at substantially increasing the domestic production, the government has set an ambitious production target of 1 BnT by 2020.
The availability of rakes have also improved substantially at an average to 200 from 185 of last year. In addition now evacuating coal is not a major issue owing to rise in availability of rakes which have recently increased to 225-230 rakes in the past few weeks and also expected to improve further.
The company has registered a 16% rise in consolidated net profit at INR 2,543.80 crore in Q2 of FY16 on the back of higher net sales growth of 8% corresponding to last fiscal.
In this fiscal the e-auction prices were under pressures owing to demand supply gap. On one hand rise in production quantity of coal reduced prices naturally in FY16, on the other company is more focused to increasing production quantity and quality, also manage pressure on margins.
Earlier the government had auctioned mines to power and non-power segment, out of the coal mines auctioned seven have already produced around 5 MnT and 34 mines would start production by 31 Mar’15. Therefore, the peak rate production capacity expected around 50-60 MnT when all auctioned mines will started.
Leave a Reply