India to Overtake US as World’s Top Coal Producer

India is set to surpass the US as the world’s biggest coal producer after China by 2020, as state-miner Coal India Ltd. ramps up output to meet demand from domestic power producers, according to BMI Research.

The South Asian nation’s share of world output will increase to 12.7% by 2020 from 9.8% in 2016, BMI said in a report Thursday. It cautioned that the country will still fall short of the government’s ambitious coal output target and domestic demand will continue to exceed production up to 2020, Bloomberg reported.

India, where coal accounts for 61% of electricity generation capacity, is seeking to reduce imports of the fuel by boosting domestic output. India foresees coal as a dominant source of energy at least for a couple of decades, while other countries, including the US, are moving faster toward replacing the fuel with cleaner energy sources such as natural gas to meet tougher emissions standards.

India plans to expand coal output to 1.5 billion metric tons by 2020 from an estimated 634 million tons in the year ended March 31. China produced nearly 3.7 billion tons of coal last year, according to the country’s National Bureau of Statistics.

It may miss its expansion target due to delays in opening up the sector to private companies for commercial mining, BMI said. India’s coal deficit is expected to narrow to 163 million tons by 2020 from 191 million tons in 2016, it said.

 Demand Declines

In view of weak demand for power in the country, the dispatch of coal by Coal India to power sector declined by 12.7% to 26.4 million tons (MT) in August this year. The company’s supply to power sector in the first five months of the current fiscal also dropped by 2% to 157 MT, against 160 MT in the corresponding period of previous fiscal.

Coal dispatch by Singareni Collieries Company, declined by 9.4% to 3.6 MT in August 2016. SCCL is a coal mining firm jointly owned by Telangana and the Coal Ministry.

Expressing concern over lack of power demand, Coal Secretary Anil Swarup Thursday wondered as to what would the government do with its ambitious one billion tons of production target for fossil fuel by 2020. He had stressed upon the need to increase the demand for power.