Coal India Production Rises For Second Straight Month In November

Coal India Ltd.'s production and sales rose for the second straight month in November, indicating that the world's largest miner of the fossil fuel may be recovering from disruptions such as prolonged rain and landslides at its subsidiaries.

The state-run miner's production and sales rose 27 percent and 17 percent over the previous month, respectively, it said in an exchange filing. That comes after four successive months of decline till October, according to company data.

The metrics, however, fell by nearly 4 percent and 8 percent over the previous year. Flooding due to the monsoon affected operations at the miner's biggest subsidiaries—South Eastern Coalfields Ltd. and Mahanadi Coalfields Ltd. Output at these arms declined over the previous year by nearly 12 percent and 14 percent, respectively, the company said.

Protests at Coal India's mine in Talcher, Odisha, too hit production after a landslide killed four workers in July.

South Eastern Coalfields plans to raise output at its Dipka mine in Chhattisgarh to 90,000 tonnes per day by the first week of December and to 100,000 tonnes per day by the middle of January, Coal India had said in an interview with BloombergQuint.

Northern Coalfields Ltd., however, emerged as a bright spot, producing nearly 12 percent more coal over the previous year, according to company data. Bharat Coking Coal Ltd., too, ramped up output.

Yet, Coal India's production may struggle to breach the 600-million-tonne mark for 2019, Edelweiss Securities said in a research note.

The company, however, said it's making efforts to meet its annual target of 660 million tonnes despite setbacks at its three major subsidiaries—South Eastern Coalfields, Western Coalfields Ltd. and Mahanadi Coalfields.

Offtake Declines

Offtake at South Eastern Coalfields and Mahanadi Coalfields fell 18 percent and 16 percent year-on-year, respectively, with dispatch volumes declining 7.2 percent to 363.7 million tonnes so far this year.

Coal India's dispatch volumes have remained below 5 percent for 11 out of 12 months since November 2018 even as its volumes have grown at an annualised rate of 5.2 percent over the past five years.

On Monday, Coal India shares rose 0.39 percent to Rs 205.85 apiece on the BSE while the benchmark Sensex gained 0.02 percent to end the day at 40,802.17 points.