Coal output unlikely to be scaled down, inventory to substitute fuel import: EY

India’s coal production is unlikely to be scaled down as the demand far outstrips the local supply available, global consultancy firm EY on Wednesday said. It further said that the buffer inventories of coal will be consumed once the downstream plants start running at full capacity after the lockdown is lifted.

“Given that India’s demand of coal far outstrips the supply available locally, miners are unlikely to reduce output of operations but continue to build receivables in the hope the inventories will eventually substitute imports of coal once the downstream businesses stabilise to normal…,” Saurabh Bhatnagar, Partner and National Leader, Metals and Mining, EY India, said.

Coal miners, he said, have so far continued operations in near full capacity, except that the offtake of coal from the collieries on account of reduced electrical power consumption has created buffer inventories.

This inventory will eventually get consumed as the downstream plants go for full capacity utilisation post-lockdown, he said.

ET Energy World
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