Inventory Reduction of Northern Hot-Rolled Coils May Narrow Amid Demand Challenges

Eastern Coalfields Limited (ECL) said on August 31 that it had begun precautionary sealing measures at Khandra Colliery in the Raniganj coal belt. Surface cracks and ground subsidence were first observed near the Nikanth Temple on July 28. ECL said unauthorised structures and illegal occupants in the affected area had restricted surface-filling work. As the cracks could not be properly filled, external air could enter the underground workings, aggravate the spontaneous heating of residual coal and further increase the risk of spontaneous combustion. ECL therefore initiated the sealing measures to protect employees and surrounding areas and will continue monitoring conditions at the site. Existing employees will be redeployed to other units of the same mine or neighbouring mines according to operational requirements. The sealing measures will not disrupt existing water or electricity supplies to residential quarters. ECL has not determined how long the sealing will remain in place and rejected reports suggesting that the colliery could be sealed for three months. The final duration will be determined based on expert advice, technical assessments and established mine-safety requirements.

Extreme drought has lowered river levels in East Kalimantan, disrupting transportation operations for some coal producers. Data from Indonesia’s meteorological agency showed that East Kalimantan received almost no rainfall in August. To prevent barges from running aground, local producers have been forced to reduce their coal loads. A local port official said that barges normally capable of carrying 7,000 tonnes of coal are currently limited to approximately 5,500 tonnes, representing a reduction of 1,500 tonnes, or about 21.4%, per trip. Some barges continue to face difficulties travelling upstream despite carrying reduced loads. The industry group noted that the decline in carrying capacity per trip will require more voyages and raise logistics costs.