India: CIL ramps up Jan'20 Coal Output to meet its Fiscal Target

CIL's coal output for January 2020 are out and the company has churned out 54.2 MnT of coal till 27 January, thus recording a double digit growth of 10.7% y-o-y basis. Till 27 Jan'19 the company had churned the coal output of 48.9 MnT.

According to the press release, the company's daily coal output during the month is averaging at 2 MnT and thus, it is likely that it may touch a mark of 60 MnT by the end of the January month (by 31 Jan'2020). In Jan'19, the CIL's coal output stood at 57.2 MnT and if we compare the same against previous month of Dec'19, it was recorded at 58.02 MnT.

CIL has set an annual coal production target of 660 MnT for ongoing fiscal year and according to the company data, its coal output in the first nine months starting from Apr'19 to Dec'19 stands at 388.4 MnT against 412.4 MnT in the corresponding period of previous fiscal. Subsequently amid concerns that it may fall behind its annual target, the miner had unveiled its plan last month to ramp up its daily output for Jan-Mar quarter to meet the target. Till December 2019, the company was churning a daily output of 1.8 MnT and had set per day output target of 3 MnT for Q4 FY29 (Jan-Mar'20). This means that CIL's daily output is still short by 1 MnT (as in Jan'20 it churned about 2 MnT of coal per day).

According to the company's press release, the increase in coal output in Jan'2020 can be attributed to two of its subsidiaries, Mahandai Coalfields Limited (MCL) and South Eastern Coalfields Limited (SECL). MCL surged ahead with 21.5% production growth, as of the referred date, followed by SECL with14.4%. These are two of the largest producing subsidiaries of CIL, which combined contribute close to half of CIL'S total coal output. Mining activities in the two subsidiaries had been hit severely during monsoon and also due to law and order issues.

CIL's coal dispatch

CIL's coal offtake as of 27 Jan'2020 stands at 48.07 MnT, thus registering a growth of 6.2% compared to same date last January, the increase in volume terms being 2.8 MnT.

Sufficient stock with power plants

The company's press release states that there is no shortage of coal in the power plants, with a total of 65.7 MnT currently available in the system, of which stock at CIL's pitheads is 31.4 MnT. Whereas, thermal power plants of the country were adequately stocked with 34.2 MnT of coal (as of 25 January) sufficient for 19 days consumption.

The current level of coal stock at the power plants is 14.9 MnT more than that of a year ago period. Last year same date it was 19.4 MnT.

"Better management of supply logistics ensured that coal stock at various power stations was maintained throughout the year and the number of critical power plants never touched double digit during 2019-20 as per CEA" said the stated official.

After almost 3 years, the number of NTPC plants and NTPC/JVS having super critical stock was down to zero. With power plants sufficiently stocked with coal supplies, it gave leeway to Coal India to liquidate over 78% of non-lapsable arrears rakes of non-power sector consumers pertaining to 2017-18 and 2018-19. Beginning with 5,143 arrears rakes as of 1 April 2019, CIL brought down the number to about 1,116, thus clearing 4,027 rakes and is hopeful of clearing the rest by the end of the current fiscal.