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Coal imports rise 13 per cent on power thrust

Coal imports rose 13 per cent to 18 million tonnes in July from a year earlier, according to provisional data from online market operator mjunction, propelled by weak prices and addition of new coal-based power plants.

India, the world's third largest importer of the fossil fuel, is cranking up generation from coal-fired power plants to make up for a shortfall in hydro-electricity.

Coal and Power Minister Piyush Goyal told parliament on Monday that power from dams has fallen considerably due to weak monsoon rains this year. Coal-based generation, which accounts for more than two-thirds of the total, grew 20 per cent in June but many plants are now critically short of coal.

"Import is practically rising every month and every year, and it is likely to remain so as domestic production is not enough to meet demand," said Viresh Oberoi, chief executive and managing director of mjunction, a joint venture of Tata Steel and Steel Authority of India Ltd.

The country is struggling to raise coal output fast enough as state monopoly Coal India LtdBSE 0.97 % has fallen short of its targets for years due to delays in acquiring land, getting environmental permits and inherent inefficiencies.


Imports of thermal coal, used in power generation, are expected to surge 11 per cent to 150 million tonnes this fiscal year, according to mjunction.

Total imports stood at 168.4 million tonnes last fiscal but are expected to be much higher this year on the government's concerted efforts to provide power for all.


Of the total imports in July, thermal coal accounted for 14.5 million tonnes, according to data from mjunction based on monitoring of vessels' positions and figures from shipping companies. The government does not regularly release coal import data.

"China is not in the market in a big way, so international prices softened, prompting Indian companies to buy more," Oberoi said.

Thermal coal prices have nearly halved since early 2011 due to weak demand in China and global oversupply, helping India cushion the impact of heavy imports from countries like Indonesia, Australia and South Africa.

Source: Reuters