CIL’s increased domestic production reduces imports

Sai Nikesh | The Dollar Business India’s state-owned Coal India in January ramped up coal production from domestic mines, which resulted in decrease of imports in the month. According to reports from online traders on Monday, decrease in shipments impacted the coal imports that has fallen by 21% in January, over the previous month. The shipments remained low in the month due to a decreased demand from the domestic steel makers, added the report. However, India’s largest online trader ‘mjunction data’, in its report says that the coal imports in January, 2015 recorded 3 % year-on-year increase. While the coal imports in January, 2015 remained 15.73 Million Tons (MT), it was only 15.37 MT in January, 2014. Going by the statistics from the report, India’s coal imports in January stood at 15.73 MT against 19.75 MT in December. Due to a lesser demand from steel makers, the imports of cooking coal, a raw material used for making of steel, fell to 2.4 MT in January from 3.2 MT in December. Metallurgical coke, another material used by the steel firms was also down to 98,770 tons from 1.76 lakh tons in January. However, a larger demand from fuel-hungry power plants has increased the imports of non-coking coal used as thermal coal for power generation, stood at 15.91 MT in January as against 15.36 MT in December. In 2014, the power companies alone imported 163 MT of steam coal, out of total coal imports of 210.55 MT in the year, accounting to a total share of 77%. According to sources, Viresh Oberoi, Chief Executive and Managing Director of mjunction, was quoted to have said that the imports in February are also likely to be nearer to January levels due to a better availability of domestic coal. The data shows that Coal India's April-January output rose 6 %to 389 MT, as it opened new mines and got environmental clearances to raise output from operating mines. According to the earlier reports, Coal India Limited projected drop in its domestic production from existing mines over the next five years. "It is seen that there is drop in contribution from existing mines and completed projects to the tune of 25 MT," says a detailed note on projected Coal India Ltd production. However, the production is expected to grow from the ongoing and future projects of CIL. According to a Indian Chamber of Commerce(ICC)report, the data proved by CIL says that 179 forestry proposals are awaiting clearances and if all approvals are secured on time, it can more than double its output to 1,132 MT, given that mines start production from 2016-17. The ICC report also covers the supposed plans of India like focusing on investments in the coal sector, expedition of mining explorations, among others as key focus areas to boost the coal production.  

This article was published on February 9, 2015.