In spite of reporting a 10.5 per cent growth in production state owned Coal India Limited (CIL) is still six million tonne (mt) short of production target during April-September 2013.

The target of the company was to increase production by 28 mt to 482 mt (454 mt) in this fiscal. To achieve the targeted production level the company will have to mine at the rate of about 1.6 mt a day for the remaining period of 2013-14.

According to a news report in Business Line company sources said that higher supplies than production resulted a drop in pithead stock to approximately 28 mt. CIL reported 0.4 per cent growth in production and two per cent growth in offtake during April-June 2013.

It is likely that higher production in October-December may merely add on pithead inventory, as railways will be preoccupied in moving the harvested crop, thereby, limiting scope for evacuation of coal to power plants.

Although company insiders agree that CIL may miss the production target for the year, they say lower production will not result in any supply shortfall as the gap will be bridged by diluting inventory.

“For years CIL went on accumulating inventory due to mismatch between production and evacuation. We have reserved the process since last fiscal, thereby diluting 14 mt of stock (from as high as 71 mt on March 31, 2012),” a source was quoted saying.