The coronavirus pandemic has dimmed coal demand outlook in India and forced state-owned miner Coal India's (CIL) to review its ambitious growth plans. CIL managed to increase its output to 84.36 million tons in March, 6.5% higher than a year earlier. However, its annual production for the 2019-2020 fiscal year ended March 31 declined 0.8% to 602.14 million tons.
CIL's annual output last fiscal year missed its target of 660 million tons, marking its fifteenth straight failure in meeting its production target. CIL aims at increasing production to 710 million tons of coal by the 2020-2021 fiscal year and to 1 billion tons by the 2023-2024 fiscal year. However, the record level of coal inventories in India puts CIL's output growth plans under pressure.
As of March 31, CIL's current coal stocks are 74 million tons, while inventories at power plants reached 45 million tons. India's 21-day nationwide lockdown imposed since March 25 is expected to push inventories even higher, as several coal-consuming industries are shut.
CIL's total supplies to consumers such as utilities and industrial users declined by 10.3 year-on-year to 53.45 million tons in March, with supplies for the full fiscal year down by 4.3% to 581.73 million tons. CIL plans to talk with the coal ministry to cut the production target. However, the ministry is expected to resist the proposal as the production target is part of a broader government's plan to ease import dependence.
