Coal import bill continues to rise

India’s coal import bill surged 42 per cent to ₹11,441 crore in November 2014 despite a 16 per cent increase in Coal India’s production, highlighting the rapidly widening demand-supply gap for the fuel in the country.

The import bill widened despite coal prices in major exporting countries such as Indonesia, South Africa, and Australia being nearly 20-25 per cent lower than the same month last year. In November, the rupee-US dollar exchange rate had also been at the same level as that of the corresponding month last year, indicating a surge in India’s coal import volumes.

Initial industry estimates from traders and research firms pegged India’s coal imports for 2014-15 to be around 180-185 million tonnes, about 10 per cent higher than last year. The estimates are yet to be revised.

Coal India’s efforts to raise production have seen an increase in output to 45.47 million tonnes in November. Improvement in November’s production comes after a 15 per cent year-on-year improvement in October.

But despite the improved performance, coal stocks remained low across the country’s thermal power plants.

Through November, around 55 out of 100 thermal power plants had coal supplies of seven days or less.

Coal India is currently working on a plan to raise annual production to 1 billion tonnes by 2019 as India seeks to stop imports of thermal coal. The production target for 2014-15 is 507 million tonnes.

The overall coal requirement for the power sector — indigenous as well as imported — is 595 million tonnes for 2014-15. There is an overall shortage of 81 million tonnes of indigenous coal for the power sector, according to replies in the Lok Sabha from Piyush Goyal, Minister of State (Independent Charge), Power, Coal and New and Renewable Energy.

Coal Ministry officials do not expect a drop in imports in 2014-15 despite the best efforts to raise domestic production.

“I think we should be able to see a combined impact of Coal India’s production and the production from the blocks to be auctioned/allocated in March 2015, in 2015-16’s import bill,” Coal Secretary Anil Swarup said recently.

Swarup said the target is to ensure that India completely stops thermal coal imports by 2019 and is in a position to export.

“By 2019, the projections are that India’s requirement will be 1.4 billion tonnes of which we expect Coal India to provide 1 billion tonnes. With production from captive coal mines and those given to the private sector, we should be in a position to export coal,” Swarup said.

International projections are not as optimistic. Global analysts, including Glencore (one of the largest traders of the fuel), predicts India to be importing 300 million tonnes by 2020.

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