India's Coal Imports Jump

Source: Shivom Seth, Mineweb  (12/9/11)

"Coal imports in September rose 51% from a year ago, to 2.65M tonnes, with the country deliberating importing large quantities of the fuel."

India's coal deficit is expected to double to 265M tonnes over the next five years despite a three-fold increase in government spending on the sector. The Indian government's planning commission has said that domestic coal demand in India is set to increase to 1,000M tonnes by the end of the period 2012 to 2017, necessitating about 200M tonnes of imports to bridge the shortfall in domestic output.

The commission has estimated that domestic production will rise to 770M tonnes by 2017, on the basis of projected annual growth of around 7% in output.

Data showed that in the six months between April and September 2011, imports of coal jumped by about 70%. Overseas coal purchases rose to 20.9Mm tonnes between April and September, from 12.3M tonnes a year ago.

Coal India, which is the world's largest producer of coal and accounts for over 85% of India's production of the dry fuel, has also lowered its production target for the ongoing financial year to at least 440M tonnes, from the estimate of 452M tonnes in its annual plan.

Officials said importing large quantities of coal at today's prices would mean a Forex bill of around $32B. Imports in September rose 51% from a year ago, to 2.65M tonnes, they added.

As per an Indian government planning commission document, output in 2011-12 was expected to reach 680M tonnes, but the estimate was later scaled down to 630M tonnes in a midterm appraisal by Prime Minister Manmohan Singh. It was again revised downward to 554M tonnes.

In the last fiscal, Coal India produced about 431M tonnes of coal, almost the same output it recorded in 2009-2010. The firm has said it was planning to mine between 556M tonnes and 615M tonnes of coal between 2012 and 2017.

Earlier, Coal India had asked the government to scale down its production target for the 2011-2012 financial year to 448M tonnes, fearing it would not be able to make up for the slippage in output in the first half of the fiscal.

The company had missed its April-to-September target by about 20M tonnes, recording an output of 176M tonnes as against the target of 196M tonnes. Officials blamed inclement weather, including heavy rains in August and September, which they said affected production in almost all its collieries.

Last year too, Coal India lowered its production target to 440.20M tonnes from 460.5M tonnes. As per the Geological Survey of India, as of April 1, 2011, a total of 285,862M tonnes of geological resources (coking coal 33.47B tonnes and non-coking coal 252.4B tonnes) of coal have so far been estimated in India up to the maximum depth of 1,200m.

Shivom Seth, Mineweb