After monsoon, would coal stock status be sufficient for India in FY2023?

Mining of coal is difficult during the rainy season in India. In FY 2022, India saw a crisis in coal after the monsoon. Although in FY2023, coal supplies at power plants could be in a secure position, trying to make the FY2022 situation improvable. A significant increase was seen in coal production in June 2022, which was 67.59MT, compared to the production of June 2021, which was 51.04MT. Given the increase in energy demand in summer FY2023, there were concerns that a post-monsoon coal scarcity similar to FY2022 would occur again. But in India, power plants had 30 MT of coal in reserve at the start of August 2022. In addition, approximately 12 MT of stock is available in private washeries, goods sheds, ports, and CIL's sidings, and is ready for transportation. Due to heavy rains in August 2021, thermal power plants coal reserves fell to dangerously low levels, which led to an increase in the price of coal in the market. The whole 6 MT of imported coal allocated in two medium-term bids by an Indonesian company to CIL is expected to be used. Although it is expected that whole quantity would not be utilized. This utilization depends on requirement of Gencos.

In order to get closer to CIL's goal of 700 MT of production, the strong coal output growth at the beginning of FY2023 has caused the expected growth rate for the balance of the year to drop from 12.4% to 8%. The rainy season has been a problem for coal mining, but keeping stocks of coal for further use might be a solution. To make this possible, coal production should be increased before the arrival of the monsoon.


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