After a disappointing performance for most part of this financial year, the State-owned major Coal India Limited (CIL) is expected to register 3 percent production growth end of December as compared to the same month last year.
The company had suffered losses due to flooding this monsoon in one of the company’s largest open pit mine at Dipka in Chhattisgarh. The cause of flooding on September 29 ,2019 is attributed to the change in the course of the rain- fed Lilagar river.The mine which has a production capacity of 30 million tonne a year, is expected to return to its full production in about a week.
CIL is essentially considered an opencast miner because 94-95 per cent of its total production comes from open pit sources and thus mining activity slows down in the monsoon season, when the haul roads get slushy.
Furthermore, the coal belt of India witnessed one of the heaviest rainfalls this year and consequently CIL’s monthly production which was sluggish since beginning of the fiscal, fell below last year’s level since the second quarter.
During April-June 2019, the company registered growth as little as 0.1 per cent.
The current daily production at CIL is around 1.82-1.83 million tonne (mt). Although the cumulative production from April-December, 2019 is likely to remain lower compared to the same period last year, the December output is showing signs of major recovery.
The development comes at the time of surge in electricity demand in December. The coal-based power generation is ruling above last year’s level in December, showing signs of revival in demand.
The coal situation at power stations is comfortable with an average of 18 days equivalent stock, as on December 23 which includes 1.4 mt of imported coal with the total stock of over 30 mt at the power plant end. CIL has already stored over 22 mt coal at the pithead.
If electricity demand increases gradually in the coming winter months, CIL will be able to meet the winter demand but it depends whether CIL can sustain its growth and cope up with the growing demand.
