Coal India Ltd (CIL) is set to miss its production target for the current fiscal set at 492 million tonne (mt) even as the government prepares to sell stake in the world’s largest coal miner.
Till November it has managed to produce only 95% of the target set for the first eight months of the year, CIL said.
During April-November CIL’s mining subsidiaries collectively produced 274.71 mt, 5% below its proportionate target of 289.38 mt set for the period.
It now appears that CIL would fail to achieve the 2013-14 target despite assurances by its chairman Narsing Rao. After losing about 5-6 mt of production in October due to heavy rains, Rao had told analysts that CIL wouldn’t revise its targets downwards as he was reasonably confident of facing the ‘’challenge’’.
But November hasn’t been good for the state-owned miner too as production at 39.20 mt fell 7% short of the target of 41.93 mt.
Even in terms of offtake, which is described by CIL management as a true barometer of performance as it indicates sales, the target for the eight month period ended November hasn’t been met.
Against a target of 310.43 mt, actual offtake has been 298.63 mt.
Lower production means the user industries, particularly power sector, need to import more coal, as indicated by a recent CIL document.
“The requirement of imported coal is building up with the execution of Fuel Supply Agreements.
As of now the requirement of imported coal is in the tune of 5 mt for the power plants of the companies who have already executed FSAs and mandated to opt for supply of imported coal through CIL,” a document for bidders in a tender document issued last week said.