* May miss annual production target by 5-6 mln T - chairman
* Sees no let up in India's coal import needs in 2013/14
* Hints at raising coal prices on higher diesel costs
(Adds quotes, details)
By Malini Menon
NEW DELHI, Feb 14 (Reuters) - Coal India Ltd (CIL)
will miss its production target for the current year by up to 6
million tonnes and will meet its supply target by drawing on
stocks, its chairman said on Thursday.
The world's biggest coal miner, which has a production
target of 464 million tonnes for the current fiscal year through
March, has a supply aim of 470 million tonnes.
The state-run miner, which produces about 80 percent of
India's coal output, has a stockpile of 47 million tonnes,
Chairman S. Narsing Rao said, nearly 24 million tonnes lower
than its stocks at the beginning of this financial year.
"Some shortfall (in production) will be there. It is a
little tough to predict. I expect a shortfall of maybe 5 to 6
million tonnes," he told Reuters by phone.
Coal India produced 355.31 million tonnes of coal during
April to January 2013, up 5.8 percent from a year earlier,
according to the coal ministry.
"The 470 million tonnes (supply aim) is really more
sacrosanct (than the production target)," Rao said.
Rakesh Arora, managing director and India head of research
at Macquarie Capital Securities (India) Private Ltd, said: "The
production is immaterial, what matters is the offtake (supply)
and that is the number to focus on.
"CIL remains on track to meet the offtake target of 470
million tonnes or so. Production is purposely limited to reduce
the inventory," Arora said.
Even though the miner's output has grown 10.8 percent so far
in this fiscal year, Rao said it was inadequate to meet
burgeoning demand from the power sector.
More than half of power generated in India is through
burning coal. The country has an installed power capacity of
nearly 211,000 megawatts (MW), nearly 48 percent more than it
had five years ago.
Coal production has failed to keep pace with capacity growth
in the power sector in India, where energy production falls far
short of the demands of a fast-growing economy, Asia's third
largest, and an increasingly affluent population.
Last August, India faced one of the world's worst-ever
blackouts, when three of its five transmission grids collapsed,
cutting power to states which are home to some 670 million
people or more than half of the country's population.
India, which has about 118 billion tonnes of coal that could
be mined, ekes out only about 600 million tonnes annually, due
to delays in obtaining regulatory and environmental approvals.
Rao said there was "no way" the coal shortage in India could
be met in the five years through March 2017, adding the
country's reliance on coal imports would remain.
India imported 102.7 million tonnes of thermal and coking
coal between April and December, up 28.2 percent from a year
earlier, provisional figures showed.
"We may be able to reduce imports possibly in the 13th
five-year plan," he said, referring to the period 2018 through
Rao also said he could not rule out higher coal prices,
possibly in the next fiscal year. The miner saw its power and
fuel costs rise 35 percent year-on-year to 59 rupees ($1.10) per
tonne, mainly due to higher diesel prices, in the third quarter
of this fiscal year.
"We cannot rule out (price increases). We've seen the diesel
price rise. It is a sensitive matter. At what time, I can't say
($1 = 53.7850 Indian rupees)
(Editing by David Holmes)