Coal India 's regular supplies to the power sector, its largest customer, have been halved this week compared to daily sales at the beginning of April, leading trade unions to demand drastic reductions in production to minimize losses so that the firm has enough money to pay salaries.
Total supplies to the sector decreased by nearly 70% this month compared to April 2019.
Total sales decreased by 26 per cent, demand decreased by 11 per cent and stocks increased by 60 per cent to reach 76 million tons in April.
Energy firms refuse to accept supplies because their warehouses are almost complete due to low demand. Many customers do have large stocks, as many plants are shut down.
Coal India is urgently looking at that supplies to plants that can still take additional coal, and its subsidiaries are still generating the same quantity as they are selling, but this is also on the decline. This has also suggested a reduction in rail freight so that it can supply high-grade coal from Eastern India to Southern Coastal Plants that import fuel from overseas.
Hind Mazdoor Sabha wrote to Pralhad Joshi, the coal minister, saying that the company would make losses in the current situation. The Minister recently announced that the company's production and sales goal will stay the same at 710 million tonnes.
"Normally, the average daily production of Coal India is around Rs 250 crore while the expense is around Rs 200 crore," the union said. "With a dramatic fall in sales and rising taxes, the company's daily income has decreased considerably, but the costs have remained more or less the same since the company is still trying to meet its annual production target for the year."
ET reported on April 27 that Bharat Coking Coal, a subsidiary of Bharat Coking Coal, had been talking to banks about the payment of salaries to its 42,000-odd employees, as it received very little from its consumers during the month.
Coal quality deteriorates if stored at collieries for a long time as its moisture content increases the reduction of its energy content. In addition, stored coal can catch fire when exposed to air for a long time.
