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Coal India’s production dips marginally by 1% in 2020-21, offtake too down 1.3%

Owing to lower demand from the power sector due to the COVID-19 pandemic, state-run Coal India Ltd’s (CIL) production saw a marginal drop of 1 percent during the financial year 2020-21 to 596.2 million tonne (MT), as compared to 602.1 MT during the previous financial year.

On the other hand, offtake saw a decline of 1.3 percent to 573.8 MT compared to 581.4 MT in 2019-20. “Despite our best efforts there was a marginal contraction in output and off-take by 1 percent and 1.3 percent respectively on a year-on-year comparison due to COVID-led lack of demand,” the company said in a statement.

Primarily, what affected CIL’s supplies was reduced coal lifting by the power sector and a steep 31 percent fall in road transport despite the company’s efforts to convert traffic from road to rail during the lockdown period. Coordinated efforts with Railways witnessed loading from CIL’s own sources go up by 11 percent on a year-on-year comparison. “The shrinkage in supplies could have been more had not 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 MT 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 the first quarter, the company has sufficient buffer to meet any surge and the stocks would be reduced substantially,” the statement added.

The company claimed that it was successful in curbing coal imports to the tune of 90 MT during the financial year 2020-21. Also, beating the previous estimates the PSU coal major booked an all-time high of 124 MT in its e-auctions. Overburden removal sustaining its growth trajectory throughout the fiscal logged 17 percent growth easing the way for faster future production.

Through a series of initiatives, CIL pumped additional quantities of coal into the system that prompted customers for opting 90 MT 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 had opened a new window exclusively for coal importers in October 2020. 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 generation companies, under flexi-utilisation, enabling them to avert coal imports.
CIL set a new high in booking 124 MT of coal under five e-auction windows in 2020-21 eclipsing the previous record of 113.6 MT achieved in 2016-17. Compared to 66 MT booked in 2019-20, CIL logged a strong 88 percent growth in auction bookings. In absolute terms, the increase was 58 MT.
Source: Money Control

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