Informist, Tuesday, Sept. 2, 2025

--Coal India official: Plan to reduce 85 mln tn stock by 15-20% in 2 months

--Coal India official: Stock reduction to help raise output, sales

--Coal India official: Plan to increase production after monsoon

--Coal India official: Company's recent policy changes improving coal sales

By Avishek Rakshit

KOLKATA - Coal India Ltd. aims to reduce its coal stockpile of 85 million tonnes by 15-20% in the next two months, which will help the company scale up production and increase sales as well, a senior company official told Informist. "The inventory has reduced to around 85 million tonnes now from the previous level of 91.5 million tonnes as on July-end," the official said. "After the monsoons are over, we plan to scale up production substantially and hence we need to prioritise clearing the inventory."

At the beginning of the current financial year, Coal India was loaded with over 107 million tonnes of pithead stocks, which fell to 91.5 million tonnes in July and then fell further to 85 million tonnes at the start of September. Coal India has set a target to produce 875 million tonnes of coal and sell 900 million tonnes of the fossil fuel in 2025-26 (Apr-Mar).

"Looking at the trends of liquidating inventory, 13-20 million tonnes is expected to be cleared by way of sales in the next two months. The monsoons are going to end by then and the festive season is going to start which is expected to boost electricity consumption," the Coal India official said. "Hence, we target to bring down the high inventory levels substantially."

For instance, in October last year, which coincided with the festive month, electricity generation rose marginally by 0.5% on year, and by 4.2% month-on-month, to 134.22 billion kilowatt hour, despite overall muted demand conditions. That month, Coal India was able to sell an additional 10 million tonnes of coal compared to 61.4 million tonnes sold in September. Production also increased by 11.6 million tonnes in October to 62.5 million tonnes compared to the output of 50.9 million tonnes in September.

"As soon as the rains subsided to some extent in key mining areas, we had increased production in August. This is what we are looking to do – increase production and sales as soon as it stops raining," the company official said.

Last month, the company's production jumped by 9.4% on year to 50.4 million tonnes and sales volume increased by 7.6% on year to 56.7 million tonnes.

However, even if Coal India succeeds in bringing down its inventory by 20% to 65 million tonnes, it will still be more than double the 30 million tonnes the company considers as an optimal stock level.

According to the official, coal is stored at the mines which produce coal and there is no dedicated warehouse for the fossil fuel. So, high stocks at the mines prevent the Maharatna company from mining more coal as there is no place to store it.

The company's largest subsidiary, Mahanadi Coalfields Ltd., has the highest inventory of around 30 million tonnes, followed by the second-largest subsidiary, South Eastern Coalfields Ltd., which has an inventory of over 25 million tonnes. Another subsidiary, Central Coalfields Ltd., has an inventory of over 10 million tonnes.

"We have taken several steps like easing the regulatory requirements on use of coal by the power and non-power segment to boost sales and to some extent, such measures have yielded results. But the overall demand for coal remains poor," the official said.

In November last year, Coal India had tweaked its policy to allow non-power sector consumers such as sponge iron companies, ferro-alloy makers, and cement companies to buy more coal than the annual contracted quantity under the long-term linkage auctions.

For the power sector as well, Coal India first tweaked its policy to simplify coal allocation through two mechanisms and later allowed power producing companies to buy coal without insisting on them having power purchase agreements with power distribution companies in place. Last month, Coal India further relaxed its policy for the power sector allowing power companies to sell surplus power produced from Coal India's coal on the power exchanges.

At 1346 IST, shares of Coal India were up nearly 1% at INR 381.25 on the National Stock Exchange. End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Ashish Shirke

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