Coal Demand-Supply Gap in India to Widen as CIL Gives Output Goal a Miss

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Researched by Industrial Info Resources India (Delhi, India)--In a major setback to India's effort to improve the domestic coal demand-supply situation, public sector coal mining company, Coal India Limited (CIL) (BSE: 533278) (Kolkata), recorded a shortfall in its output for the financial year ended March 31, 2014. The coal major could produce only 462 million tons (MT), which is 20 MT less than its annual production target.

CIL has missed the target in two successive years now. During the financial 2012-13 the company produced a total of 452.5 MT of coal as against the target of 464 MT, falling short by 11.5 MT. This dismal performance by the world's largest coal miner is likely to widen the country's coal demand-supply gap, which is estimated to reach 185.5 MT by the end of 2016-17.

According to the provisional performance data, released by the coal mammoth, only the largest coal producing subsidiary of CIL, South Eastern Coalfields Limited (SECL), and two others could meet their respective output targets for the financial year, while five others missed their goal by thick margins.

SECL produced 124 MT of coal, while Eastern Coalfields Limited (ECL) and Bharat Coking Coal Limited (BCCL) produced 36 MT and 33 MT, respectively.

On the other hand, Mahanadi Coalfields Limited (MCL), the second-largest coal-producing subsidiary of CIL, could produce only 110 MT as compared to its annual target of 120 MT. Similarly, Northern Coalfields Limited's (NCL) total output stood at 69 MT against a target of 72 MT.

Central Coalfields Limited (CCL) produced 50 MT against 54 MT while output by Western Coalfields was around 40 MT as compared to its individual goal of 44 MT. North Eastern Coalfields Limited (NECL) which makes the smallest contribution to CIL, produced 0.66 MT in 2013-14 as against the target of producing 1 MT of coal.

CIL accounts for over 80% of domestic coal production in India. The company is targeted to produce a total of 507 MT during the current year.

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