Team News Riveting
At the end of COVID clouded financial year 2020-21 (FY ’21), Coal India’s (CIL) silver lining, amid output and off-take challenges, came in the form of curbing coal imports to the tune of 90 Million Tonne (MT).
The feat came amidst the company registering near flat production in the year that posed manifold challenges. The state-run miner produced 596.2 million tonne (MT) of coal in the financial year 2020-21, the CIL said in a BSE filing today. The production achieved in all the eight subsidiaries of the CIL is near flat as it is less by just one per cent compared to previous fiscal’s output.
In the financial year 2019-20, the company had produced 602.1 MT of coal.
Of the eight subsidiaries of the CIL, South Eastern Coalfields Limited (SECL) emerged as the highest coal producing entity with 150.6 MT followed closely by Mahanadi Coalfields Limited (MCL) that produced 148 MT. While the SECL registered a nominal production growth of 0.04 per cent, MCL pegged it at 5.5 per cent.
The Northern Coalfields Limited (NCL) was the third highest producer among the CIL entities. It recorded an output of 108.1 per cent followed by Central Coalfields Limited (CCL) that produced 66.9 MT of coal in the just concluded financial year. Of the two leading arms of the Maharatna company, MCL recorded a growth of 9.4 per cent in offtake of coal, SECL’s contracted by 2.2 per cent.
Through a series of initiatives CIL pumped additional quantities of coal into the system that prompted customers for 90 MTs of domestic coal in lieu of coal imported from abroad.
“In the absence of our import substitution measures through a host of concessions and benefits the customers would have had no alternative than to source coal from imports. In that, it was a productive and timely move”, said a senior executive of the company.
The company opened a new window exclusively for coal importers in October ’20. CIL allowed its subsidiaries to sign MoUs with 17 power plants linked to them to substitute their imports with its own coal, for blending. Additional coal was allocated to Central and State Gencos, under flexi-utilization, enabling them avert coal imports. ACQ for power plants was enhanced to 100 per cent of normative requirement from 90 per cent.
Increased quantities of coal were offered to non-regulated sectors against FSAs up to 100 per cent of ACQ. Trigger level for the power sector was elevated from 75 per cent to 80 per cent. Increased bookings in auctions was a major booster in import substitution efforts. While these actions cumulatively helped the Power Sector opt for domestic coal to the tune of 42 MT, NRS picked up bulk of the rest.
CIL set a new high in booking 124 MTs of coal under five e-auction windows in FY’21 eclipsing the previous record of 113.6 MT achieved in 2016-17. Compared to 66 MTs booked in 2019-20, CIL logged a strong 88% growth in auction bookings. In absolute terms the increase is 58 MT.
CIL produced 596.2 MT of coal ending FY’21 against 602.1 MT of last fiscal, while the off-take was 573.8 MT compared to 581.4 MT. “Despite our best efforts there was marginal contraction in output and off-take by 1 per cent and 1.3 per cent respectively on a year-on-year comparison due to covid led lack of demand” said the stated official.
Primarily what hampered CIL’s supplies was reduced coal lifting by the power sector and a steep 31 per cent fall in road transport despite best efforts for conversion from road to rail during pandemic lockdown. Coordinated efforts with Railways witnessed loading from CIL’s own sources go up by 11 per cent on a year-on-year comparison. “The shrinkage in supplies could have been more had it not been for the spate of actions and sops offered to our customers”, said an official of the company’s marketing division.
The lack of demand also led to a stockpile of 99 MTs at CIL pitheads. Further production would have resulted in stocks building up even higher. On the positive side with the expected demand revival during summer months of Q1, the company has sufficient buffers to meet any surge and the stocks would be reduced substantially.
