World’s largest coal producer keeps adding to global supply glut
Coal India, the world’s No.1 producer of the fossil fuel, posted Friday results that show its annual output climbed 8.6% to 536 million metric tons in the year ended March 31.
While the state-owned miner missed its production target for 2014-15 by nearly 2.5%, its offtake also rose by 8.8% during the period.
According to India’s coal minister, Piyush Goyal, the company’s output was the highest almost three decades.
Coal India’s production increase is in line with the firm’s goal of reaching a target of 1 billion tonnes a year by 2010. In total, the country aims to generate 1.5 billion tonnes of coal within four years to power its economy and reduce imports, with the remaining 0.5 billion produced by private companies.
However, only a handful of companies that won the right to mine coal for their power plants last year have begun production as they struggle to recover their costs, while the ministry delayed last month plans to open up commercial mining to private firms because of weak demand and weak coal prices.
Earlier this week, analysts such as Platts Coal said that record-low natural gas prices and high inventories are expected to keep a lid on thermal coal prices until at least the second half of 2017.