New Delhi: Coal India Ltd., the world’s biggest miner of the fuel, reported the lowest production and shipments in three years after heavy rains flooded its mines.
Coal production in August dropped 10.4% from a year ago to 32.4 million metric tons and shipments declined 9.6% to 36.72 million tons, both plunging to the lowest since the same month in 2013. Rains and local agitations cut output by 2.4 million tons, N. Kumar, technical director at the miner, said on Wednesday.
The Kolkata-based miner’s plans to double annual output in four years have been undermined by inadequate demand from power utilities, which account for almost 80% of its shipments. A government plan to revive power distributors may boost generation and push demand for the fuel that fires almost two thirds of the nation’s generation capacity.
“The drop in production and offtake is a near-term negative for Coal India, but it’s still not a dire situation,” said Abhisar Jain, a Mumbai-based analyst at Centrum Broking Pvt. “Power plants continue to use their own coal inventory, which may have affected Coal India’s production and dispatches, coupled with strong monsoons. We expect things to improve in a month or so, as plants go for restocking of coal and monsoons subside.”
Coal stocks at power plants monitored by India’s Central Electricity Authority dropped to the lowest level since 4 April. Plants had stocks of 28.3 million tons as of 30 August, enough for an average 21 days.
Coal India’s production in the five months ended 31 August rose 1.3%, while shipments increased 0.2%. The company plans to raise output almost 12% to 598.6 million tons in the year to 31 March. Bloomberg