India’s largest coal miner Coal India Ltd. (CIL) has surpassed the 500 million tonne (mn t) mark in coal dispatches in FY’22 (Apr’21-Mar’22) at a much faster rate compared to the previous fiscal year. Last year, the milestone was attained towards late-February.
Driven by strong demand from the power sector, the company’s dispatches reached 501.06 mn t on 10 Jan’22, 18% higher than the volume supplied in the corresponding period of the previous fiscal. Domestic coal demand saw a substantial rise after Covid restrictions were lifted this year.
Notably, coal-fired generation increased 13% y-o-y to 759.99 billion units (BU) in Apr-Dec’21 against 673.65 BU in Apr-Dec’20. Besides, its share in the conventional energy mix rose from 74% to 77% in the period under review.
Subsidiary-wise coal dispatch in FY’22
Source: Coal ministry | Data as on 10 Jan’21
In terms of subsidiary-wise performance, Mahanadi Coalfields Ltd (MCL) supplied the highest volume of 134.72 mn t, followed by South Eastern Coalfields Ltd (SECL) at 117.99 mn t. These two subsidiaries together accounted for half of the supplies in this period.
In fact, out of the seven subsidiaries currently in operation, except Eastern Coalfields Ltd (ECL), others registered a y-o-y increase in coal dispatches so far.
Focus on improving production
In contrast to the fast-rising coal dispatches, CIL’s production has increased at a slower pace. Notably, cumulative output till 10 Jan’21 was marked at 433.85 mn t, up 5% y-o-y.
The company generally tends to lower its production volume in the first half of the fiscal (Apr-Sept) in order to liquidate the excess inventory at the mines. The output increases gradually in the second half (Oct-Mar) to replenish the stock level.
However, due to the subdued production growth in comparison to elevated demand, the company is still relying on inventories. Notably, stock level at CIL mines was assessed at a new low of 31.9 mn t at the end of Dec’21.
Consequently, the company has scaled up production in Jan’22 to maintain adequate buffer stock going forward. During the first 10 days of Jan’22, total production of 20.22 mn t has slightly outpaced the corresponding dispatches of 19.34 mn t. The company would be expecting this trend to be continued going forward.
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