Standard Post with Image

Rise in Pithead Stock May Force CIL to Rethink on it's Ambitious 1 Billion Production Target by 2020

News

State-owned Coal India's pithead stock has increased by 13 per cent to 48.6 million tonnes as on May 29. 

Source: ET

SNP Insight

Power procurement from discoms have been reluctant in nature,thereby forcing the power plants to run on low PLFs leading to a low of 65% as national average which is deemed as lowest for past 15 years. Some power plants have shut down there units owing less/no power demand which would impocted the cost economics negatively for their continued operation.

With CIL and Governments joint efforts the ramp up in coal production rate is evident at the country levels.( 11% rise in coal production in 45 days of 2015-16) making the black fuel availability better for the end users. However, the transportation and support infrastructure for coal is still not upto the mark for the country coupled with reduced demand from thermal power plants  might lead to pit head stock rise (49 MT). Given, this scenario lurking the rejig in terms of increasing the production capacities of the coal major might strain upon the revenue cycle and the envisaged growth might be impaired. Hence it calls for a collective and participative initiative from all stake holders to ensure conformity on all fronts for India as an energy secure country.

Source: SNP Infra Research