Coal India has ended the first 10 months of this fiscal with 6 per cent growth in production, at approximately 389 million tonnes (mt). The miner’s current output is 1.5 mt a day.
Going by past trends, the daily output may touch 1.7 mt by the end of the financial year, taking the total production this fiscal to around 490 mt — up by nearly 6 per cent compared with 462 mt in 2013-14.
The rise in output does not necessarily mean a corresponding rise in availability of fuel.
Offtake or sales moved up only 3.2 per cent over the last 10 months, meaning a good part of the production still remains at the pithead.
According to the monthly data provided by CIL, 2.5 mt of the 46.6 mt of coal produced in January, has been added to the inventory. With wagon availability remaining much lower than required; the pace of inventory accumulation should increase in February and March. While wagon availability always lags production in the peak output months in winter; sources say the rake (a full cargo train) availability particularly suffered this year as Railways was busy ferrying more imported coal.
From 207 rakes a day in January, the loading average at CIL end dropped to 197 in the first fortnight of January.
Inventories rising again It is normal for the miner to accumulate pithead stocks during peak production months in winter and dilute the same in the summer.
But, the rate of inventory accumulation is exceptionally high this year, compared with the last two years.
Between 2012 and 2014, Coal India brought about a major change in operations.
In a shift from its age-old practice of accumulating pithead stocks on a year-on-year basis, the miner diluted inventories by 22 mt. Against annual production, the share of inventories came down from 15 per cent to 10 per cent.
This means, while production grew by only 27 mt, between April 1, 2012 and March 31, 2014, the availability of fuel increased by over 49 mt. The trend will be reversed this year.
Sources say the miner has stockpiled 42 mt of coal at the pithead as at end-January. And, going by the current rate of inventory accumulation, the stockpile is likely to increase to last year’s level of 49 mt, if not more.