Bhubaneswar: A key unit of Coal India has cited a lethal outbreak of dengue among reasons for a 1.3 million tonnes fall in its output for August, underscoring the production woes of the world’s biggest coal miner as it struggles to meet growing domestic demand.
Officials at Mahanadi Coalfields Ltd (MCL), a Coal India unit, said an outbreak of dengue in August was so bad at seven open-cast mines in the eastern Orissa state that it killed 24 people, creating panic among workers, many of whom fled.
On top of that, heavy rains affected mining operations through the month. A near week-long strike by contract laborers worsened the situation.
“The strike, dengue and continuous rains all combined together are bottlenecks that hindered our production,” A.N. Sahay, chief of MCL, told Reuters, adding daily output from the mines dropped to 7,000-8,000 tonnes from 120,000 tonnes.
While Coal India has said issues such as environment clearance and law and order have held up several new mining projects, a parliamentary panel has recently called some of its excuses for missing output targets “lame” and urged it to address the problems.
Sahay said MCL’s total production in August fell to 6.1 million tonnes from 7.4 million tonnes of mostly non-coking coal in the corresponding period a year ago. In 2010-11, MCL produced 100.28 million tonnes of coal, or a little less than 25% of Coal India’s total production of about 431 million tonnes.
Sahay expressed confidence of meeting the unit’s annual output target of 106 million tonnes for this year ending March 2012, however, as production from its other mines in the state is growing at about 11-12%. “We still have seven months left. Hopefully in September rains will not be so continuous,” he said.
Last week, pollution authorities called for at least 22 mines owned by Coal India to be closed over environmental concerns, potentially causing an output loss of up to 40,000 tonnes a day.
India’s second largest company by market capitalization, Coal India accounts for nearly 80% of coal output in a country hungry for the fuel to generate the electricity needed to keep up its near-double digit growth.
The Kolkata-based miner has seen its shares rise over 25% this year. The Indian government sold a 10% stake in Coal India for $3.4 billion in the country’s largest IPO ever last November.
India produced about 526 million tonnes of coal in 2009-10. Imports were 73.25 million tonnes in the same year and given the booming demand, thermal imports could rise to more than 100 million tonnes by 2015.