Indian coal producer Singareni declares force majeure

Indian state-controlled coal producer Singareni Collieries (SCCL) has announced a 15-day force majeure across its mines in southern Telangana state, after heavy rain affected output.

Lower domestic output could raise demand for imported coal.

The force majeure will be in place from 17-31 July, a cement maker said, citing a notice that was sent to all SCCL customers early this week. The notice did not mention the volume of decline in coal output.

SCCL typically produces an average of about 5.6mn t/month of coal and supplies utilities and industrial consumers. It produced 5.66mn t of coal in June, up by 1.8pc on the year. The producer supplied 4.97mn t of coal to utilities and 820,000t to other consumers in June.

Production was at 17.11mn t during April-June, the first quarter of the April 2023-March 2024 fiscal year, up by about 1pc from a year earlier.

The coal producer operates 18 open-cast mines and 24 underground mines in Telangana. Heavy rain and associated water logging typically affect output from open-cast mines as it becomes challenging to operate mining equipment.

But the drop in SCCL's output could possibly be more than offset by rising production from state-controlled Coal India (CIL), which meets more than 80pc of India's coal needs.

India's coal production continues to rise on the year despite the onset of the monsoon season, which typically weighs on output and dispatches. Coal production was largely unaffected because of mine-wise advance planning for the June-September monsoon season, the Indian coal ministry said on 18 July.

Domestic production was around 35.22mn t during 1-16 July, up by nearly 14pc from the corresponding period of 2022, according to Argus calculations. Domestic output was at 258.6mn t during 1 April-16 July, up from 236.7mn t over the same period last year, the ministry said.

Coal producers have constructed concrete roads for uninterrupted evacuation from larger mines. Meanwhile, transportation from nine coal mines to railway sidings has been started through mechanised coal handling plants, the ministry said.

India had 103mn t of coal stocks as of 16 July, up by 34pc compared with 76.9mn t on the same day last year, the coal ministry said. Higher coal stocks have strengthened the country's capability to tackle unforeseen fluctuations in power demand, the ministry had said in June.

By Ajay Modi