Photo by: Duane Daws
KOLKATA (miningweekly.com) – Amid the overall trend of declining coal imports, Indian thermal power and cement companies are showing a preference for shipping in thermal-grade coal from South Africa rather than the traditional shopping destination of Indonesia.
The latest government import data shows that Indian thermal-grade coal imports from South Africa rose by 57% and that shipments from Indonesia only increased by 0.8% in the quarter ended June.
In volume terms, Indonesia continues to be the leading supplier of coal to India with quarterly shipments pegged at 23-million tons, while 10-million tons are being shipped in from South Africa.
Industry analysts and sources say that while Indonesia continues to be the highest supplier of steam coal to India, there is a shift in consumer preference towards increasing shipments from South Africa.
The sources say that the price advantage of imported Indonesian coal is declining in weighting in the calculations of importers, compared with buying coal of a higher calorific value, which is available from South Africa.
It was pointed out that, during the first quarter, the gross calorific value (GCV) of coal imported from South Africa averaged 6 000 Kcal and that that of coal imported from Indonesia averaged lower at 4 000 Kcal.
Explaining the shift towards higher quality South African coal, the analysts point out that most of the new thermal power plants entering operations over the past four years make use of super critical technology and can only use high-grade thermal coal as feedstock. Most of these are based at the coast and are dependent on imported coal.
However, the analysts are not sure whether the trend and bias towards South African coal will be sustained in the longer term. This in view of the Coal Ministry statement on Tuesday that Coal India Limited (CIL) will attempt to replace 15-million tons of imported coal with domestic coal, over the next six months.
Doubts nonetheless persist over the practicality of the move to further cut imports, as analysts point out that most new generation thermal power plants are not equipped to use low-grade domestic coal as feedstock and are entirely dependent on high-grade imported coal.
It is not clear how CIL will be able to replace imported coal with dry fuel extracted from its own mines in terms of quality and GCV, the analysts add.