Coal India Ltd (CIL), the country’s largest coal miner, continued to maintain higher production levels in May ’21 despite the stern challenges posed by the Covid-19 restrictions.
Coal production by the miner increased a marginal 2% year-on-year (y-o-y) to 42.08 million tonnes (mn t) in May ’21 compared to 41.4 mn t in May ’20. On a month-on-month (m-o-m) basis, the output rose a negligible 0.45% over the previous month’s 41.89 mn t.
Previously, the company had opted for production cut for FY ’22, due to excessive coal stocks at the pit-head mines. Notably, the company had commenced FY ’22 with a pithead stock of nearly 99 mn t.
However, a drastic surge in electricity usage has improved coal demand from the thermal plants, prompting CIL to raise production at a time when the company had reported that its operations were hit-hard on account of spiralling Covid-19 cases.
Coal off-take touches record high:
Spurred by the revival in coal demand from the power sector, the miner recorded the highest- ever coal off-take for the month of May.
The company logged a sizeable 38% year-on-year growth in dispatches to 55.14 mn t in May ’21 compared to 39.9 mn t in May ’20. But, what is noteworthy is that this growth achieved amid the pandemic is far higher even when compared to the non-Covid period of May ’19. The growth in May ’21 dispatches over May ’19 (52.09 mn t) is 5.8%.
With higher coal consumption, stocks at the power plants had fallen by 53% y-o-y to 23.87 mn t at the end of Apr ’21, as per data provided by the Central Electricity Authority (CEA). However, increased supply from CIL restored the coal stock level to 28.81 mn t at the end of May ’21.
The company has managed to liquidate around 25 mn t of coal out of its total inventory during the first two months of FY ’22, which is currently assessed at 74.3 mn t as on 31 May ’21.
Boosted by the renewed interest from the power sector, the company would be aims to further bring down the inventories entering in the second quarter, when mining and dispatch activities would remain affected by the monsoons.
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