The country may need to import 142 million tonnes of coal next fiscal to bridge the estimated shortfall in domestic production, well above the 82.33 million tonnes of imports slated this fiscal.

The Coal Minister, Mr Sriprakash Jaiswal, said on Thursday that coal demand next fiscal is likely to be around 696 million tonnes, while the output is pegged at just 554 million tonnes. Greater reliance on imports could increase input pricing pressure in sectors such as cement, steel and power generation, especially as global spot prices of coal have been climbing steadily triggered by the floods in Australia and the cyclone Yasi.

Domestic production

Domestic production of coal is slated to face a big hit, with Coal India Ltd (CIL), the country's largest producer, attributing a shortfall of around 16 million tonnes this year and 39 million tonnes of its targeted production next year to environmental issues, especially the introduction of the new Comprehensive Environmental Pollution Index. Based on the Index, critically polluted areas will be debarred from seeing any kind of expansion in industrial activity and CIL expects eight of its coal fields to be affected by this.

The earmarking of areas that are out of bound, under the Environment Ministry's classification of ‘go' and ‘no-go' areas for mining activity, is also likely to hit domestic coal production. Mr Jaiswal said a Group of Ministers on coal would meet in a week's time to deliberate on the issue pertaining to the classification of mining areas.

“The main issues to be discussed at the meeting are in relation to the environment and forest issues with regard to the coal blocks, rehabilitation and resettlement (R&R) policy and off take, among others,” said the Minister, adding that the issue is expected to be resolved before the Budget session of Parliament.

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