KOLKATA (miningweekly.com) – Coal India Limited (CIL) has recorded almost flat growth in production during April to June, putting under a cloud the government’s ambitious target for the miner to achieve an 8.5% growth for the current financial year.
The State-run miner produced 137-million tons during the first three months of 2019/20, up a marginal 0.1% over the corresponding previous period, casting doubts on whether the ambitious target of 660-million tons during the full year would be achieved.
Having produced 607-million tons during 2018/19, the government had set a target for the miner to produce at least 660-million tons in the current year and even put down an “aspirational target” of 700-million tons, both of which seemed unviable against the backdrop of production growth achieved so far.
One of the reasons for the tardy growth rate, according to company officials, was that CIL is facing severe challenges in removal of overburden (OB). Firstly, contracts for removal of OB across mines were yet to be finalised with contractors. At the same time, as coal seams get deeper in opencast mines, it requires a higher volume of OB removal and this deeper operation has to be aligned with statutory mining safety regulations with bottlenecks having emerged across several mines, resulting in CIL's inability to ramp up production in the short term.
Officials, however, pointed out that historically, CIL was able to increase production sharply over the last quarter, but having started off the year with flat production growth rates, it was unlikely that the pace of production could be increased sufficiently to make up for the first three months and hit the 8.5% growth rate target.
One of the immediate fall-outs of flat production at the start of the financial year has been a fall in coal supplies to thermal power plants during April to May 2019, which was down 2.6% at about 80-million tons, although part of this fall in supplies was also attributed to bottlenecks in evacuation of coal from pitheads and a shortage of transportation capacity.