Coal India to chase higher production target despite falling short on 2017/18 goal
KOLKATA (miningweekly.com) – Despite trends indicating that Coal India Limited (CIL) has missed its production target in the current financial year, the Indian government has fixed a higher target for the country’s largest miner for 2018/19.
Provisional data released indicated that during April to December 2017, CIL produced about 383.83-million tons of coal, missing the target for the period by 6%.
Going by the current production trend, it is clear that CIL will miss the production target of 600-million tons set for 2017/18, for which the miner will have to achieve a yearly production growth rate of 8%, against 1% achieved during the first nine months of current financial year.
Despite this, the Coal Ministry has set CIL a target of producing 630-million tons in 2018/19, or growth of 5% over its official, and most likely missed, target of 600-million tons by close of the current financial year on March 31, 2018.
CIL officials said that, at present, the prime focus of the miner during the three months of the current financial year would be to produce two-million tons a day to keep the yearly production shortfall to the minimum possible.
However, even as it bids to keep pace on the production side, CIL is keeping an eye on realisations to maintain any erosion of the bottom line in the current financial year caused by rising variable costs, and on Tuesday announced an across the board 10% increase in the thermal coal price.
As per the regulatory filing by CIL, the miner would be able to increase revenues by an estimated $308-million during the last three months of the current financial year and about $1.01-billion during 2018/19.
The price hike had become an imperative for CIL to protect its revenues and bottom line since it signed a new wage agreement with its workers last year. Sources said that the 20% hike in wages would translate to an additional outgo to the tune of $1.28-billion in a full fiscal year.
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