It was to be expected. India’s coal imports in September zoomed up by 19% to 16 million tons as compared to a year ago, no thanks to low output from the state-run Coal India Ltd (CIL), according to a report by the oil Price.
India’s imports of all types of coal rose 18.47% to 110.15 million tons (mt) in April-September, as against 92.98 mt imported during the same period in 2013-14.
An India Ratings report earlier said India had imported 171 mt of coal at $16.41 billion in 2013-14 as against 145 mt at $17.01 billion in the previous fiscal, clearly underlining the fact that India’s dependence on foreign coal is increasing.
India’s hunger for coal continues unabated, even though it sits on what many estimate to be the world’s third largest coal deposits. Inconsistent mining policies, red-tapism and a legal verdict that overturned almost all previous mining licenses for coal blocks has forced Indian companies to look to foreign shores to fulfill their coal needs.
Part of the reason for the September imports going up was low international prices of coal, making it an attractive proposition for Indian consumers.
CIL, which is also the world’s largest miner of the fuel, accounts for around 80% of the country’s total coal production but the state-owned firm has not been able to keep up with the rise in demand for coal, especially in the power sector.
To add to the woes, the Government of India has asked CIL to cancel the auction of another 3 coal blocks that were put under the hammer. Around 44 parties had shown interest in them and 2 had bid. The official reason for the cancellation is not known yet.
By the way things are moving on the coal front, Glencore, the biggest trader, has predicted that Indian imports will go up to 180 mt in 2015 and then to 300 mt by 2020. The country may soon overtake China as the biggest importer of coal it said, according to this report in the DNA.
Glencore's figures are based on assumptions that India's coal-fired power capacity would go up from 145 gigawatt installed now to a target of 214 gigawatt by 2020, leading to 345 mt of fresh demand for coal.
Analysts have also noted current low level of stock of coal lying with the power plants indicating higher imports in coming days.
