Singareni misses coal production target amid market slump

Singareni Collieries Company Limited (SCCL), despite being profitable for two decades, has failed to meet its 2025-26 production target of 72 million tonnes, achieving only 58 million tonnes.

Peddapalli: Singareni Collieries Company Limited (SCCL), which was running in profits during the last two decades, failed to achieve its production target this time around. SCCL has fixed a target of 72 million tonnes for the financial year 2025-2026. Instead of a fixed target, about 58 million tonnes (81 percent) production was achieved.

Though 2.81 lakh tonnes of coal has to be produced every day across the company, only 1.90 lakh tonnes was produced due to various reasons. Except Sattupalli and Bellapally, production has come down in all other areas such as Kothagudem, Yellandu, Manugur, Ramagundam-I, II, III, APA and Bhupalapally.

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Lack of demand for Singreni coal in the market and delay in commencement of new coal mines are said to be the reasons for not achieving the target.

Anticipating lower production, SCCL authorities reportedly reset the target and reduced production in few areas in the wake of objections from thermal power stations to get Grade-14, 15, 16 variety coal. Grade-15 variety coal is widely being produced across the Singareni. However, there was no market for this variety. Moreover, thermal power stations are denying this variety on the grounds of poor quality.

Especially super critical thermal power stations are not accepting Grade-14, 15 variety coal. So, the company has reduced the production in few areas. On the other hand, the production in Kothagudem and Yellandu OCP mines was delayed. Though it was estimated to get 4 million tonnes in the Naini coal block of Odisha, it did not materialise due to cancellation of tenders following alleged irregularities.

Moreover, when compared to Coal India and foreign coal, the price of SCCL coal is three times higher. Though the Singareni has already reduced Rs 650 on basic price, companies want it reduced further. The company is spending Rs 3,400 to produce a tonne of coal and sell it in the market at Rs 3,622. So, it is facing troubles to reduce the cost further.