High coal prices to intensify India's efforts to curb imports
High seaborne prices for coal will push India to lift domestic supplies and accelerate efforts to curb imports, according to a top government official.
The country’s miners, including State-run Coal India Limited, are preparing to meet the entire coal demand from grid-connected power plants in the fiscal year starting in April, federal Coal Secretary Anil Kumar Jain said in a phone interview. The government expects a sharp rise in production from Coal India’s mines as well as from captive producers -- companies that produce coal for their own use.
Some Indian power producers have sought to secure coal imports after supply disruptions and rising demand left the country grappling with shortages last year, although consistently high seaborne prices may limit such purchases. Those prices have swung wildly this month after Indonesia, the world’s biggest thermal coal exporter, put restrictions on exports and then recently started to ease them.
High import prices present India’s domestic miners with an opportunity to expand their market share, while forcing users to depend heavily on domestic supplies, Jain said.
“The Indonesia situation is a favorable development for Coal India and other domestic miners,” Jain said. “If the international prices remain high, it will give impetus to our plan to eliminate substitutable coal imports.”
Prices at Australia’s Newcastle port, considered an Asian benchmark, have almost doubled over the past year, even after retreating almost 40% from a record in October.
Kolkata-based Coal India is expected to produce 640-million tons in the current fiscal year, and increase output to 700-million tons in the next year, Jain said. The miner will likely start the fiscal year in April with an inventory of 50-million tons. Production from captive mines is seen rising by a third to 120-million tons, he said.
Coastal power plants, which run mainly on imported coal, continue to run at low capacities. To make up for the lost generation, the ministry plans to send more coal to plants that rely on domestic supply to help them produce more, Jain said.
Coal inventories at power plants have more than tripled since early October, when they slumped to a seven-year low, according to data compiled by Bloomberg.
India consumed 906-million tons of coal in the year ended last March, about a quarter of which came from imports, according to data from the coal ministry
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation