Production and Demand of Indian coal in 2019
26.11.2019 by V. K. Arora, Chief Mentor, Karam Chand Thapar & Bros Ltd
2018-19 was a good year for coal production, as CIL, the main producer in India managed to increase its production from 567 MMT to 607 MMT (7%). Coal India Ltd was able to kindle a hope of resurgence and we thought at this rate, we should be able to reach the target of 1000 MMT by 2025. Singareni (SCCL) also picked up and managed to produce about 62 MMT. India’s coal imports were 233 MMT with a coking coal component of 47 MMT. Overall, it seems to be going well.
Looking at the positive trend, current year’s target was fixed at 650 MMT but there has been problems aplenty right from the word ‘go’. MCL a major producer had a strike of 14 days – whose hangover is still continuing. Another major producer, SECL, had to face exceptionally heavy rains which resulted in flooding of ‘Dipika’ – a mine producing 1,200,000 MT /day. The whole river entered the mine and to recover from that was a 'herculean' task. A mid-term review in October revised the target to 620 MMT, and the pundits feel - despite their confidence - that CIL may even fall short of the last years’ figure of 607 MMT.
This would mean that imports would go up. The optimists would put the figure at 250-260 MMT. However, the power companies are not in a good shape. Renewables have marked their existence and are getting preference for meeting the demand. The economic activity has generally slowed down and for the first time, power demand seems to have gone down. Coal based power plants are not in panic because of lower availability of coal. We expect, imports to be at a level of around 245 MMT.
Slowdown of economic activity should be a temporary phenomenon, and with government having taken serious steps to set it right, power demand should pick up in due course – to coincide with increased production of CIL.
You may not see the kind of coal shortage we had seen earlier. This does not mean ‘Happy days are here again’. For this, we may have to wait.
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