By Sudarshan Varadhan
CHENNAI (Reuters) – Coal India Ltd reported a 12.8% fall in production in June, reflecting the third straight month of decline in output as national coronavirus lockdowns cut demand for the fuel.
Coal output fell to 39.20 million tonnes in June, compared with 44.95 million tonnes in the same period the previous year, the Coal India said in a filing to stock exchanges. Offtake by customers, such as power generators, fell to 41.61 million tonnes in June.
The world’s largest coal miner, which wants to produce 1 billion tonnes of coal by 2023/24, saw its annual production fall during the year ended March 2020, marking the first such decline in over two decades.
India used nearly a billion tonnes of coal in 2019/20, about three-quarters of it at power plants. State-run Coal India accounts for over 80% of the country’s production.
Provisional government data on Wednesday showed electricity demand fell 9.9% in June, suggesting a recovery amid greater consumption in industrial western states as India slowly lifts restrictions and allows factories and offices to operate.
However, analysts expect power usage during the current financial year to fall for the first time in decades. Utilities have refrained from purchases of coal amid stockpiles expected to last for weeks and Coal India’s own inventory hitting record highs.
With India ramping up usage of hydro electricity and solar power and cutting down on coal use for electricity generation this year, demand for coal might remain tepid.
Shares of Coal India, which closed marginally higher on Wednesday, have lost over a third of their value, more than twice the 14.3% decline in the broader Nifty 50 index.
(Reporting by Sudarshan Varadhan; editing by Emelia Sithole-Matarise)