Coal Demand To Exceed Supply

Demand for coal will far outstrip the domestic supply by 2006-2007, the terminal year of the 10th Five-Year Plan. According to a report prepared by Ranchi-based Central Mine Planning & Design Institute Ltd (CMPDI), a subsidiary of Coal India Ltd (CIL), the demand for coal will shoot up, leaving a shortage of a little over 60 million tonne. This is in spite of the projected increase in production by CIL. According to the report coal demand by the power, cement and steel industries is estimated to go up to 326 .81 million tonne, 18.27 million tonne and 40.92 million tonne, respectively, with other industries accounting for 79.07 million tonne of demand. Against this, availability of coal from CIL subsidiary companies would be 350 million tonne. Singareni Coal Company Ltd (SCCL)and other private coal companies would make available 55million tonne at the terminal year of 10th Plan. When asked as to how the shortage of coal during the 10th Plan would be met, a senior official of CMPDI told Business Standard that the steel sector had been importing coking coal to the extent of 10 to 12 million tonne every year. The cement and power sectors had already started importing non-coking coal. Thus the shortage of indigenous production would be compensated to some extent by imports. However, the official was not sure about the cent per cent projected production by the CIL's subsidiaries as most of the subsidiaries had been running with acute fund crunch. The estimated coal production by the CIL's subsidiaries would depend on availability of funds to develop the sanctioned coal projects and also smooth sailing of the land acquisition process. He mentioned that a number of coal projects had been stalled for want of funds. The overhead costs of the subsidiaries had been increasing year after year due to maintaining of surplus manpower. Some of the subsidiaries wanted to reduce surplus manpower through voluntary retirement scheme (VRS). But response from the employees for VRS was negligible in comparision with huge surplus manpower, he said.