Coal India missing output target doesn’t matter, mining millions of tonnes more does: Russell

Coal India missing output target doesn’t matter, mining millions of tonnes more does: Russell

What’s more important? The fact the Coal India will once again miss its annual output target, or that it will produce over 31 million tonnes more than it did the previous year?

Recent media reports have highlighted that Coal India Ltd (CIL), the state-owned behemoth that’s the world’s largest miner of the fuel, will likely miss its target of producing 598 million tonnes in the fiscal year ending March 31.

“CIL may miss by 20 million tonnes and it should be between 570-578 million tonnes,” Coal Secretary Susheel Kumar said of the target, in an article in the Economic Times on March 12.

Assuming CIL reaches the lower end of the range, the 570 million tonnes produced in 2016-17 would still be 31.25 million, or 5.8 percent, more than what it managed in 2015-16.

More impressive is that CIL’s output has gone from 452.2 million tonnes in the 2012-13 fiscal year to around 570 million in the year about to end, meaning that the company is mining some 120 million tonnes more annually than it was a mere five years ago.

CIL regularly misses its output targets, most likely because they are set on the optimistic side. But this shouldn’t overshadow the company’s achievement in boosting its production despite the infrastructure and bureaucratic constraints it faces.

It should also be pointed out that the company is still a very long way off its target of 1 billion tonnes of annual output by 2020.

If it continues to add around 30 million tonnes to its production each year, it would only reach around 700 million tonnes by the end of the 2020-21 fiscal year.

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But the question is whether India actually needs CIL to produce 1 billion tonnes a year, given the country is scaling back its plans to build new coal-fired power plants.

Four proposed so-called ultra-mega power plants, with a planned total generating capacity of 16 gigawatts (GW), were cancelled last June by the Energy Ministry.

India scaled back its total coal-fired plans by 40 GW last year, according to a study by non-government and anti-coal group CoalSwarm. Read More…


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