Coal India subsidiary Central Coalfields Limited (CCL) reported a 55% decline in offtake to customers in April, making CCL one of the worst affected Coal India subsidiaries during the lock-up due to the coronavirus outbreak.
The company’s April output was 2.89 million tons (MT) compared to 6.42 MT reported in the same corresponding period last year.
The average drop in Coal India’s overall offtake, including all of its subsidiaries, was estimated to be about 25.5 per cent, which is almost half the drop in offtake registered by CCL. Coal India’s total coal production decreased by around 11%, while CCL production decreased by 29.2%.
“CCL is sitting on a large pile of coal stock and we have time till May only as the coal will catch fire in June. The moisture with the onset of monsoon season makes coal more vulnerable to degrade and catch fire,” a senior CCL executive told ETEnergyworld.
He added that the country needs to utilise the opportunity of exporting coal to neighbouring countries like Nepal, Bangladesh and Sri Lanka to get rid of large accumulated stockpiles. “The Nepal government has written a letter to Coal India in May this year showing interest in importing coal from India,” the executive said.
Coal minister Pralhad Joshi on Tuesday said on twitter that Coal India has offered a flexible route of coal auction, extending the lifting period to 3 months for supporting coal consumers amidst the ongoing COVID-19 pandemic. Prime Minister Narendra Modi also recently gave directions to target thermal coal import substitution, at a time when a huge coal stock inventory is available in the country.
“The import of non-coking coal in India was around 12 MT during April. The port transport and handling cost as well as railway freight charges need to come down if we want to substitute the imported coal with the domestic coal,” the CCL executive said.
Earlier in April, Coal India raised the minimum guaranteed commitment level of coal supply, known as the trigger point, to 80 per cent from the current 75 per cent for its electricity consumers covered by Fuel Supply Agreements (FSA) for the year 2020-21. CIL ‘s coal subsidiaries were told to enforce the raise immediately.
The goal is to enable power plants to opt for increased domestic supply of coal and to keep them away from imports as far as possible. Rising the trigger level to 80% is aimed at genes requiring more fuel, the company said.
