Rains may disrupt coal supply
The prospect of torrential rains in some of the country’s major coal producing regions is threatening to extend the shortage of stocks at power plants.
According to a Indian Meteorological Department bulletin on Monday, heavy rain is forecast over Bihar, Jharkhand, Gangetic Bengal and Odisha — all big producing states — on Tuesday, which will continue on Wednesday.
The adverse weather forecast comes at a time Coal India is looking to step up its production to keep pace with the fuel demand of the thermal power plants.
According to industry sources, rain on Monday has already impacted operations at Eastern Coalfields and some mines of Bharat Coking Coalfields and Central Coalfields.
The major problem arising from heavy rainfall is the inundation of coal mines, given that Coal India has mostly open cast mines.
While dewatering has to be done to resume operations, prolonged rainfall further complicates and delays the process. “Continuous rain makes it difficult because water keeps getting into the mines,” a source said.
Coal India’s daily production has been around 14-15 lakh tones in October which is an improvement over the production of 11-12 lakh tones in mid-September.
Sources said the public sector miner was looking to aggressively step up production after Durga Puja and take the production per day to beyond 16 lakh tones by the end of October to cater to the high demand. However, the adverse weather and torrential rain could play a dampener and delay the process.
Coal stock at domestic power plants have gone down as demand for power surged with the economy emerging from the pandemic at a time international coal prices are surging. Power plants have utilised their already low stocks for generation to meet demand.
Rahul Sharma, CEO of the aluminum business of Vedanta, told CNBC TV18 on Monday that coal supplies, which were more than 90 per cent of the company’s demand in August have dropped to 30 per cent at present.
He said the coal price increase will hurt the aluminium industry from the third quarter of the fiscal.
Coal India had prioritised supply to the power plants by cutting down supplies to the non-power sectors such as aluminium, cement and sponge iron.
As of October 15, 2021, the stock remained at critical level in 112 power plants out of the 135 plants monitored by the Central Electricity Authority. Total stock was at 7.5 million tonnes which is enough to meet the generation requirement of only 4 days.