What is one man’s meat is another’s poison.
The proverb seems to be true for India’s coal supply woes.
The country’s power ministry has advised all provinces to start importing coal for the next three years in order to operate their power plants … which, in turn, is music to the ears of coal miners in the United States.
According to a report by the Energy Information Administration, U.S. miners, otherwise struggling to find buyers, may end up exporting 104 million tons of coal in 2018 — up 7.2% from a year ago.
In April alone, India purchased almost 7 million tons, which was one-fifth of all U.S. coal exports.
For the last few years, power plants in India have cut back on coal imports because of the fall in the value of the rupee, the rise in global prices, and increasing reliance of consumers on green energy.
Facing a major coal crunch, Indian coal ministry officials feel there’s no way out but to go ahead with larger imports.
Coal imports were likely to increase to 145 million tons (MT) in 2018, and the uptrend will continue in the next four years, according to a report prepared by the Minerals Council of Australia. The imports stood at 137 MT last year.
The Central Electricity Authority of India (CEA) has said in response to a power ministry directive to take stock of coal supply that government-run thermal power plants must import coal to fill the gap in domestic supply. By the CEA’s own reckoning, India needed to buy only 20 MT of coal from abroad. The power sector’s requirement for coal is estimated at 615 MT for fiscal year 2019.
According to the CEA, the coal stock at power plants had depleted to 15.3 MT in June 2018 — sufficient to power plants for an average of only nine days, compared with the normal level of 35.5 MT. It is the deficit of about 20 MT that CEA said must be imported.
Last year, India imported 7.54 million tons of U.S. thermal coal and 3.92 million tons of metallurgical coal (largely used in steelmaking).
In the past, Narendra Modi’s government has repeatedly stressed that India was eventually looking to eliminate coal imports. India imported about 80MT in fiscal year 2016, but imports fell to 53 MT in fiscal year 2018.