In the face of monsoon challenges, India’s state-run mining giant, Coal India Limited (CIL), demonstrated outstanding performance in coal production during August 2023. This surge in production, a 13% year-on-year increase to 52.3 million tons (million tons), marks a significant milestone compared to 46.22 million tons in August 2022. Impressively, CIL has consistently exceeded 50 million tons of coal production each month in the first five months of FY24 (April-August 2023).
As coal-based power generation experiences a robust resurgence, CIL faces the imperative to bolster production. This is essential to maintain an adequate coal inventory at power stations, as depleting stockpiles pose a looming challenge.
According to the Central Electricity Authority, coal inventories at power plants have witnessed a sharp decline, plummeting to 30.34 million tons as of 30 August 30 2023, down from 35.16 million tons at the end of July. However, this inventory level still slightly exceeds the year-ago figures of 29.23 million tons.
In addition to replenishing dwindling power plant inventories, CIL must also fulfil its supply commitments, catering to both the power and non-power sectors. Recent initiatives include offering a substantial 6.55 million tons of coal for the power sector through auctions conducted under the SHAKTI scheme, scheduled for lifting between August 2023 to October 2023. Additionally, 3.619 million tons of coal have been allocated for sales to the ‘other’ sub-sector through the sixth tranche of linkage auctions for the non-power sector.
In terms of production targets, CIL has been steadily aligning with its objectives in the initial five months of FY24. This promising trajectory indicates a proactive approach to meeting growing coal demands. Against a coal production figure of 703.22 million tons recorded in FY23, the company has set an ambitious target of reaching 780 million tons in FY24.
CIL’s remarkable performance in coal production, dispatches, and strategic initiatives highlights its pivotal role in India’s energy landscape. As it continues to evolve and adapt to changing demands, CIL remains a cornerstone of the nation’s energy infrastructure, ensuring a steady coal supply to power its growth.