Coal India likely to miss annual production target

Coal India Ltd (CIL) may have finalised a blueprint to reach production capacity of 1 billion tonne of annual output by 2020, but the world's largest coal miner would continue to falter on both production as well as supplies in coming days.

CIL on Monday reported a provisional production of 47.98 million tonne (mt) in February as against target of 46.58 mt, a growth of 3%.

The monthly figure, however, belied its performance till date during the year, as output in the 11 month period at 436.96 mt is 3% below its same period target of 450.14 mt.

While offtake, or actual lifting of coal by consumers, at 43.17 mt in February came close to the target of 43.34 mt, for the year-to-date period, supplies at 441.85 mt are well below the target of 469.92 mt.

Over corresponding 11-month period of previous year, there has been marginal positive growth in both output and supplies at 6.8% and 3.5% respectively, figures revealed by CIL on Monday showed.

With annual production target of 502 mt, CIL has to produce 65 mt in the terminal month of March, which means a sequential growth of 35% over what was achieved in February, analysts said.

CIL figures came a day when coal and power minister Piyush Goyal said on the floor of Parliament that the government is monitoring domestic production of coal at regular intervals to avoid shortages.

"Multi-dimensional efforts are underway by the ministry of coal to enhance production of domestic coal beyond current year's target in order to bridge the shortfall in availability of indigenous coal," Goyal said in a written reply to the Rajya Sabha.

The saviour for the domestic power sector is the global coal market, which continues to remain depressed as not-so-encouraging news continues to flow from main consuming markets, making imports not a difficult proposition, analysts said.

"FOB price of 6000 kilo calorie coal from South Africa now rules at $64 a tonne, which was $74 a year back. There has been no discernible movement in recent times," a coal analyst with mjunction said.

In China, world's largest coal producer, consumption and production fell 3% last year for the first time in 14 years, according to fresh government data, that would weigh heavy on the global coal market.

CIL, however, has initiated a process to make long-term investments to augment supplies to users, particularly by creation of railway infrastructure.

"In the meeting held on February 27, the board considered the project report on East Rail Corridor Railways Project for construction of rail line at Chhattisgarh and accorded its approval to first year expenditure," CIL said on Monday.