November 3, 2022 - India’s coal production for first half of FY23 reached a new milestone of 382 million tonne (mt), according to CareEdge Research. The research firm said the number is in line with its earlier estimate that output may cross 350 mt during the first half of FY23, it.
“Domestic coal production has crossed 380 million tonne (MT) during H1FY23 (April–September), registering around 21% y-o-y growth over the same period in FY22, on account of a low base," CareEdge Ratings said in a report on Friday.
Coal India remains the largest contributor in terms of production.
This growth was supported by various government initiatives to maintain the coal demand and supply in the country and the contribution of the new commercial mines that became operational in Q1 FY23.
“This increased production by Captives has helped in meeting the demand-supply gap in the domestic market. The contribution of Captives in total domestic coal production during H1FY23 has increased to around 14% from an earlier 11% during H1FY22," the report said.
The coal despatch to the power sector, which accounts for the largest coal despatch has increased by around 17% y-o-y. As of August 2022, the energy deficit in the country has come down to 0.4% (465 million units) as against 0.5% (638 million units) in August 2021. While coal production has increased, electricity requirement has declined owing to good monsoon during the months of June - August.
CareEdge Research estimates the coal production to continue to rise and reach around 500 MT in the second half of FY23.
Ministry of Coal has targeted to produce 1.3 billion tonne by FY25 and 1.5 billion tonne by FY30. Further, to aid this growth, the government has issued allocation orders for 12 coal mines and indicated that the peak rated capacity (PRC) of these mines is 21 MT per annum.
“Coal prices of South African thermal coal, a global benchmark, have been on an upward trajectory since November 2021 and the geopolitical tensions between Russia and Ukraine have caused significant price fluctuations since the beginning of FY23," the report said.
“As of July 2022, the global benchmark had crossed its all-time high price of around USD 300 per tonne in April 2022 and had reached USD 329 per tonne in July 2022, before settling at USD 321 per ton in September 2022. International coal prices are expected to remain elevated owing to the heightened geopolitical tensions," it added.