CIL's supply to power sector falls in March amid slump in coal demand

The supply of coal to the power sector by state-owned CIL registered a decline of eight per cent to 42.30 million tonne in March in the wake of slump in the fuel demand due to lockdown. CIL dispatched 45.84 million tonne (MT) of coal in the corresponding month of 2018-19, the coal ministry said in its latest report to the Cabinet.

In 2019-20, the supply of fuel by Coal India Ltd (CIL) to the power sector dropped by six per cent to 463 MT as compared to 491.5 MT in 2018-19.

CIL, the world's largest coal-producing company, is a major supplier of the dry fuel to the power sector in India. The coal supply by state-owned Singareni Collieries Company Ltd (SCCL) to the power sector also dropped by 19 per cent to 4.35 MT in March, over 5.35 MT in the year-ago period. In 2019-20, SCCL dispatched 52.95 MT of coal as compared to 55.38 MT in the previous fiscal, registering a decline of 4.4 per cent.

With the power sector, a major consumer of the dry fuel, witnessing almost 30 per cent drop in fuel consumption amid the lockdown, CIL has shifted its focus to overburden removal -- the process of removing the top soil and rock to expose coal seams in its open cast mines.

The enhancement in overburden removal will enable CIL to accelerate production whenever the demand picks up and coal can be supplied to its customers at short notice.

Over 95 per cent of CIL's production comes from its 171 open cast mines. The PSU removed 114.43 million cubic metres of overburden in its open cast mines in April 2020, as compared to 104.22 million cubic metres during the same period last year, registering an increase of 9.7 per cent.

A Central Electricity Authority (CEA) report said that as on April 30, 2020, there were 50.89 MT of coal stocked up at the power houses in India, enough to last for 31 days. CIL itself has a pit-head stock of about 76 MT as on April 30.

The PSU is in regular touch with its customers, especially in the southern states, and is pursuing them to increase the intake of domestic coal as a substitute for imported coal. CIL, which accounts for over 80 per cent of domestic coal output, is eyeing one billion tonne of production by 2023-24.