Coal India hopes to arrest output decline in December

State-controlled Coal India (CIL), the country's largest coal producer, expects to post year-on-year growth in output in December after five consecutive months of decline.

CIL produced around 20mn t of coal in the first 11 days of this month and is confident it will exceed the 54mn t it produced in December last year, a company official said. Corresponding production data for the first 11 days of December 2018 are not available. But the company has increased output from some of its leading subsidiaries, including BCCL, ECL, NCL and WCL, the official said.

CIL recorded year-on-year declines in output for five consecutive months until November, contributing to a cumulative decline of 7.8pc during April-November, when it produced 330.38mn t. CIL produced 83pc of India's coal in the April 2018 to March 2019 financial year, but may have to report its first annual decline in output in 2019-20 after eight consecutive years of increases.

CIL has set an output target of 660mn t for the current financial year, up from record production of 606.89mn t in 2018-19. It took the company the first eight months of the year to achieve half of this target and producing another 330mn t in the remaining four months will be challenging.

Operations at CIL's top open-cast mines such as Dipka and Gevra were earlier hit by unusually heavy monsoon rains. Dipka, one of CIL's top three producers, was forced to suspend output in the last week of September after flooding. Operations resumed within a week, but the mine lost a chunk of its output and is now producing only 75,000 t/d against its rated capacity of around 96,000 t/d. CIL is implementing measures to prevent future flooding at Dikpa.

The decline in CIL's output hit production from some power plants, including those run by state-controlled utility NTPC. This has led power utilities to issue tenders since October to import at least 4mn t of coal in the months ahead. India's thermal coal imports totalled 139.56mn t during January-October, according to shipbroker Interocean, up from 133.01mn t during the same period of 2018.

By Ajay Modi