MonitorsPublished on Jul 18, 2016
Energy News Monitor | Volume XIII; Issue 5

Domestic coal production: Less is more?

Coal India Limited (CIL)’s choice now between the devil and the deep blue sea. On the one hand, the visible hand of the Government is exerting tremendous pressure on CIL to achieve the target of 1 billion tonnes coal production by 2020, on the other, there is the invisible hand of the market signalling that it cannot absorb a large increase in the supply of coal. What the state appears to have underestimated is the power of the invisible hand over its own iron hand. News reports in June confirmed CILs dilemma. CIL’s coal output in June was reported to be 42.72 million tonnes which was 99% of its target of 43.31 million tonnes for June. Between 2010 and 2014, CIL production increased only by 31 million tonnes, while it recorded an increase of 32 million tonnes in 2015-16 alone which was a growth rate of 9.8% a year. The Government of India has set CIL a target of 598 mt production for the current financial year (2016-17). Total coal output increased to 626 million tonnes in 2015-16 of which 90% was from state owned companies under CIL. There was also more news confirming the expectation that India is well on its way to hit the target of producing 1 billion tonnes of coal by 2020 based on a report from PricewaterhouseCoopers (PwC) a consultancy.

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