Coal India Raises 2013-14 Target to 492 Million Tons

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--State-controlled Coal India Limited (BSE:533278) (CIL) (Kolkata) and the Indian government appear to be making a concerted effort to increase production capacity and improve electrical power generation security and additions.

At a time when CIL is expected to miss its production target of 464 million tons by 2 million to 3 million tons in the current fiscal year, the Coal Ministry has set a target of 492 million tons for 2013-14 fiscal year, which exceeds the 487 million-ton target set by the national planning commission. CIL says that the current year's target was missed for a number of reasons, including a workers' strike.

CIL proposes to supply the additional tonnage mined to power producers. This could increase the coal allocation to the power sector to 377 million tons, from an earlier projection of 372 million tons for 2013-14.

By the end of the 12th Plan, CIL is aiming to have raised annual coal production to 615 million tons, which would still result in an estimated supply shortfall of 185 million tons to be met by imports.

The Coal Ministry has invited expressions of interest from consultants for a proposed restructuring of CIL, motivated by the need to introduce competition into the coal sector. The ministry also has been consulting stakeholders on pricing of coal blocks.

The government is ready to allot mines via competitive bidding at the earliest date and is addressing issues related to coal block auctions. It also has outlined plans to commence the allotment of 17 coal mines to public sector units (PSUs) starting in April. In 2012, the government offered 14 coal blocks for development to power producers and mining firms.

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