India: CIL’s coal production down by 48% m-o-m in Apr ’21

Country’s largest coal miner-Coal India Ltd (CIL) has registered a steep fall in coal production which decreased 48% m-o-m to 41.89 mn t in Apr ’21, at a time when it had possess unprecedented stock level of 99.33 mn t at its pit-head mines.

Historically, the miner lowers its coal production in order to reduce the excess coal stock in hand at the beginning of new fiscal, after witnessing a spurt in output during the final quarter of previous fiscal.

However, despite the drastic reduction seen in monthly output, production volume in Apr ’21 was 4% higher than the levels attained in the year-ago period in view of the improved coal demand.

While, the second wave of COVID-19 has severely affected the country, not much impact was noticed on the power sector. In fact, smooth operation across the end-user industry has kept power consumption elevated in contrast to the extreme situation witnessed last year.

Overall coal dispatch by CIL increased by a whopping 38% y-o-y to 54.13 mn t in Apr ’21 compared with 39.09 mn t in Apr ’20. A low-down on dispatch volume indicates that individual subsidiaries had recorded a resounding growth compared to the previous term.

Subsidiary-wise Coal Dispatch

Quantity in Million Tonne | Note: Mining operation at NEC has not restarted yet.

Outlook:

As a result of the higher electricity consumption, coal stock at the power plants has depleted at a faster rate. Inventory at power plants was assessed at 23.92 mn t as on 29 Apr ’21, sufficient for 12 days of power generation, compared with 50.79 mn t noted in the year-ago period.

It is expected that the momentum would continue during the peak summer period which will require an additional coal supply from CIL. In turn, it would encourage the miner to maintain its reduced production guidance of 640 mn t for FY ’22 without having to slash it any further.