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Coal India looks to cut next fiscal target

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  • Published 3.02.14
Rao: Output concern

Calcutta, Feb. 2: Coal India may scale down its production target for 2014-15 by 23 million tonnes (mt) on account of uncertainty over the timely completion of key railway projects in the coal bearing states of Jharkhand and Odisha.

The state-run miner has set an internal production target of 507mt of coal for the next fiscal in place of the “most optimistic” target of 530mt. The decision comes at a time the miner is likely to fall short of the 482mt target this fiscal, the second year in a row.

“Next year we may have to scale down our production target,” CIL chairman S. Narsing Rao told The Telegraph. “We have done some calculations from our side. It is still to be agreed up on by the government. We have held discussions with the coal ministry on this.”

Coal India has set a target of 530mt next fiscal as part of a strategy to ramp up output to 615mt by the end of the Twelfth Five-Year Plan (2012-17).

“The target will be possible only when at least two railway lines in Jharkhand and Odisha come up. This has not happened so far. So, unfortunately we are not in a position to say that we can achieve the target,” Rao said.

One of the railway tracks is the Tori-Shivpur line connecting North Karanpura and Auranga coalfields in Jharkhand.

The other is the rail link in Odisha, which should be able to handle 30mt a year from the IB valley coalfields. These projects are reportedly getting delayed on account of forest clearances and land acquisition issues.

Rao said in this fiscal, the miner would fall short of the target. He however, assured that there would be no shortage of coal even at a higher offtake.

“This year we might be short. We are looking at something like 475mt (against the 482mt target). But we still have a few days left… let’s see what happens,” he said adding, “I am hoping that the offtake would be 487mt.”

Coal India accounts for almost 80 per cent of the coal output of the country. But it has been unable to meet the production target so far this year on account of several factors such as the heavy rain in Odisha in October, which caused disruption at the Talcher plant under the Mahanadi Coalfields.

The miner has a commitment under the fuel supply agreements to provide coal to power units coming up after April 2009, which have an aggregate generation capacity of 60,000MW.

The PSU will have to generate 180mt extra to meet the commitment, otherwise it will have to pay a fine.