KOLKATA (miningweekly.com) – The coal shortage faced by the nonpower sector is expected to continue, although a reversal of the trend may emerge toward the end of the month, Coal India Limited (CIL) chairperson Anil Kumar Jha has said.

“A surge in demand for coal at the start of the summer months this year forced CIL to divert supplies from sectors like cement, steel and aluminium to meet demand of thermal power plants,” he told the media after the company shareholders meeting.

He said that CIL was able to increase production by 12% during the April to July quarter, but with the government’s policy to provide round the clock power to consumers, the miner was forced to keep pace with rising demand for power and CIL production was unable to match such a surge in demand from all sectors.

The power sector will remain a priority, but with CIL having an “aspirational” target of producing 652-million tons during the current financial year, supply to the nonpower sector is expected to increase, easing the supply crunch that the sector faces.

As reported by Mining Weekly Online earlier, captive power plants operated by various industries across the country were facing acute shortages of thermal coal, forcing some of the larger units to resort to imports of high cost coal.

For example, aluminium refiners, with power costs constituting about 40% of the cost of production and heavily dependent on their captive thermal power plants, have claimed that they received only 40-million tons of dry fuel during 2017/18 against a total requirement of 63-million tons. The aggregate installed captive power plant capacity of all domestic aluminium companies is around 9 500 MW.

CIL informed shareholders that in the current year, the miner would close down 53 underground mines, on top of the 43 that were closed last year.

“CIL inherited many underground mines at the time of coal industry nationalisation [1973]. Then there were more than 700 underground mines with 700 000 manpower. Now, with each passing day we are trying to rationalise these mines which are small, financially unviable or unsafe. We might amalgamate some underground mines with other opencast ones,” Jha said.

He noted that the Indian School of Mines has been mandated to prepare a report on the viability of amalgamating underground mines with opencast ones and submit a report within the next six months, which would provide the roadmap. Jha added that there would not be any job loss among miners currently employed in underground mines and that those affected would be offered new roles.

Over the years, production from CIL’s underground mines has been steadily declining, from 9% of its total production in 2012 to a shade below 6% at present.

According to CIL officials, there has been natural depletion of reserves at existing operational underground mines and an absence of contiguous new deposits is a major hurdle to the development of new underground mines as fragmented blocks have made installation of longwall mining technology in such deposits unviable.