Historically, Coal India’s production is the highest during fourth and third quarters of the year. Speaking exclusively to ET’s Sarita C Singh, Agrawal indicated that the entire imported coal quantity tied up under two tenders is unlikely to be drawn.Coalstocks at power plants will be in a comfortable position post-monsoons this year and a crisis like last August’s is unlikely,Coal Indiachairman Pramod Agrawal said. The company is reorienting its strategy by accelerating its production pace from the first quarter itself. Historically,Coal India‘s production is the highest during fourth and third quarters of the year. Speaking exclusively toET’sSarita C Singh, Agrawal indicated that the entire imported coal quantity tied up under two tenders is unlikely to be drawn. Interview excerpts:-
Following a sharp rise in power demand in summer, there are concerns that a coal shortage like last year may again emerge post-monsoon. How is Coal India prepared to tackle the increase in demand?
Post monsoon, coal stocks at power plants this year plummeting below the previous year’s levels is improbable. For Q2, coal requirement from CIL to power utilities is pegged at 137 MTs entailing a supply of 1.49 MTs on an average per day. We are so far ahead supplying 1.52 MTs per day. During the just ended July CIL‘s higher supplies ensured the generating plants build up their inventory to the tune of 1.04 Lakh Tonnes per day – a stock surge of above 3 MTs in the month.
Power plants began this year’s August with 30 MT stock at their end. Earlier only once, was the stock higher than this in FY’20 at 45 MTs. But it was in the midst of Covid when coal demand plunged due to lockdown and general slowdown of industrial activity.
Apart from the high stocks at plants’ end, around 12 MTs stock is available at private washeries, goods sheds, ports and at CIL’s sidings awaiting shipment.
What aggravated the situation last year was, in just a month, in August stocks at power plants fell by 11.2 MTs. There would not be a recurrence of such oddity unless there is an extraordinary situation.
Coal India’s production is at record levels this year so far. How do you expect to close the year?The incremental production of 40.5 MTs during the first four months of FY’23 is an all-time high for this period with progressive growth of 24 per cent. Realistically, to sustain this level of growth throughout the fiscal is difficult. But on positive side, the output expansion helped us bring down the asking growth rate for the year to 8 per cent now from 12.4 per cent at the beginning of the year. We are confident of reaching as close to the targeted 700 MTs production as possible.
The Power Ministry has eased coal blending norms for domestic coal fired power stations. Coal India placed two tenders on Indonesia’s Bara Daya Energi for importing 6 MTs of coal with scalable option upto 12 MTs on behalf of power generating companies. How much is expected to be drawn of the two tenders?
Quantity drawn depends on the demand requirement of the Gencos. So far we have received requirement for 1.4 MTs of coal for blending purpose. These two medium term tenders awarded are valid till June 2023. So, as and when requirement is expressed by the Gencos we shall tap the coal through these tenders. I feel it is unlikely that the entire quantity would be drawn.
Coal crisis post monsoons has been an annual feature. What is Coal India’s strategy for demand management next year onwards?
Increased production is the key for demand management. Next year the target will be higher. Some of our new mines will start operating and capacity of existing mines will be increased. Also our first mile connectivity projects would start contributing in greater quantities. We are working out on all fronts to meet whatever demand arises.
Reorienting our strategy, this year, we accelerated our pace from the first quarter itself which resulted in a historic high production of 160 MTs. This is almost at par with 163 MTs of Q3 production of FY’22. We are monitoring the production on monthly basis.
What is situation on environmental clearances to coal mines?
Environmental clearances (EC) is our priority and we have been successful on that front. Our coal companies have secured EC for 20 proposals with incremental capacity of around 22 MT/Y during FY’22.
The environmental clearance of the greenfield Siarmal OC of MCL with 50 MT/Y incremental capacity helped the overall capacity of the current year, so far, going up to 67 MT/Y. This includes 10 proposals cleared for incremental capacity of 9.7 MT/Y under special dispensation of additional 10 per cent enhancement.
Additional 18 projects are expected to contribute production in 23-24. Out of these 18 projects, 8 are brownfield projects and 10 are new projects. The 10 new projects will commence production and expected to contribute 19 MT in FY 23-24.
