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Coal India Raises April Output on Steady Demand



By Saurabh Chaturvedi

May 2, 2023 - State-controlled producer Coal India (CIL) raised its output and supplies in April from a year earlier, because of steady demand from utilities ahead of peak summer power consumption.

CIL — which meets more than 80pc of India's coal needs — produced 57.6mn t of coal in April, up by 7.7pc or 4.10mn t from a year earlier, according to provisional data from the company. Supplies to utilities and other coal consumers were at 62.4mn t, up by 8.7pc or 5mn t from a year earlier. But production and supplies fell sharply from March, a trend seen every year following the end of the April-March fiscal year.

The increase in domestic output on the year came as the government is making efforts to increase local coal availability and raise power generation, especially ahead of the peak of the ongoing summer season, when electricity consumption typically surges. India's nationwide coal-fired power generation, which accounts for the bulk of its overall electricity generation, continued to be strong in April. Coal burn edged higher to 105.90TWh during 1-30 April from 105.60TWh a year earlier, according to latest data from the Central Electricity Authority (CEA). It was also up from March's 103.09TWh.

Coal inventories at Indian power plants were around 35.85mn t as of 30 April, lower compared to 37mn t as of 31 March and equivalent to just under 13 days of consumption, according to CEA data. The power ministry has asked pithead power plants to maintain 12-17 days of coal stocks, while non-pithead utilities are mandated to hold 20-26 days of inventories.

India's thermal coal imports rose on the month in March to 13.2mn t from 10.28mn t in February, but fell on the year from 16.19mn t in March 2022, snapping a 10-month streak that saw seaborne arrivals rise on the year. Prospects of thermal coal imports appear to be stable given Delhi's push to ensure the country's utilities are prepared to meet any surge in power demand.

The government has already invoked emergency rules under federal electricity law, ordering utilities using imported coal to boost electricity generation to meet an anticipated increase in summer power demand. India's power ministry aims to buy 1.5GW of coal-fired electricity from imported-coal fired utilities to meet an anticipated deficit during the peak summer demand period. It has ordered utilities to import 6pc of their thermal coal requirements for blending until September.

Indian Output Rises

The growth in output at CIL helped the country's overall production to reach 73.02mn t in April, up by 8.7pc from a year earlier, India's federal coal ministry said. Overall supplies rose by 12pc to 80.45mn t from a year earlier, the ministry added.

Production from captive coal blocks allocated to end users also supported the increase in India's coal production. Output from such blocks rose by close to 18pc on the year to 9.88mn t in April.

The ministry said it is taking steps to expand rail connectivity to all major coal mines in the country to support faster evacuation and cushion the growth in production and supplies. The ministry separately said it is also taking steps to support a federal logistics programme aimed at easing supply-related bottlenecks.