Record 132 million tonne coal stockpiles cast shadow over new mines

NEW DELHI: A record 132 million tonne of coal stockpiles, enough to run the country’s power plants for two months, could put new mines at odds with a surplus market and raises the need for a relook at future requirements and expansion in mining.
The inventories ballooned as power plants reduced their stocks from record peaks at the start of the year, even as a larger stock of 103 million tonnes was added to the pile at mines operated by Coal India and SCCL, according to a note by Institute for Energy Economics and Financial Analysis (IEEFA).
“Our analysis shows coal stockpiles are growing disproportionately relative to thermal power generation,” IEEFA analyst Charles Worringham said in the note, adding such large inventories are likely to put downward pressure on domestic coal production growth.
“As coal quality degrades with prolonged storage and has a heightened risk of spontaneous combustion, operators and the community would be very keen to see the reduction of these stocks, being given priority over new coal production,” the note said.