KOLKATA (miningweekly.com) – India’s captive miners of coal are outperforming merchant miner Coal India Limited (CIL) in terms of production growth.
CIL, which accounts for more than 80% of merchant sales, produced 175.88-million tons between April and August 2017, which was down 1.7-million tons on its production a year earlier.
CIL’s production during the first five months of the current financial year was 13-million tons lower than the internal production target set for the period.
In contrast, captive mining of coal during April to August 2017 was recorded at 14-million tons, against 13.45-million tons during the corresponding period of the previous year, registering growth of 7.2%.
At least two analysts have observed that the slower growth in merchant production, compared with captive coal output, is indicative of logistical bottlenecks that merchant miners face, rather than a lack of appetite among users.
The analysts further add that the trend of rising captive production is expected to gain momentum going forward as more captive mines enter production in the next two or three years.
It was pointed out that power plants, particularly those in the private sector are changing their coal inventory management to cut costs of carrying stocks and insisting on just-in-time supplies from CIL. With a number of these power plants poised to get their dry fuel supplies from captive mines, not only will inventory management get more efficient, but aggregate supplies from captive mines are also expected to increase faster than merchant supplies.
Thermal power company NTPC is expected to lead the captive coal mining growth charge having started mining its own coal earlier this year with the aim of becoming an integrated power and coal-mining company over the next few years.
NTPC has been allocated nine captive coal blocks with estimated reserves of 7.15-billion tons. Having produced 0.8-million tons since starting production from one mine in February 2017, NTPC is aiming to produce 107-million tons of captive coal from its own nine blocks against its total coal consumption of 161-million tons a year to feed its plants.