You do not have to look too hard to find failures of state-run economies around the world. Since the collapse of the Soviet Union, there is less enchantment with the model — outside China, anyway — than there once was.
But what we remain plagued with is the idea government has a role in the ownership, operation and pricing of “strategic assets.”
We wrote recently about power rationing in China due in part to a political spat with Australia. As a result, Beijing decided it was a good idea not to buy Australian coal. In turn, it deprived the country’s power sector of a major source of supply.
Want an occasional email from MetalMiner that highlights new content with NO sales ploys? Join that list here.
India coal crisis
This week, we cover India. The state’s ownership of the monolithic Coal India mining company has for years led to underperformance, underinvestment and inefficiency.
A Reuters article paints a dire picture of the perilous state of the Indian electrical generating sector. Coal stocks have gotten so low that many generators risk running out of supplies.
As of Sept. 29, the post reports, 16 of India’s 135 coal-fired power plants had zero coal stocks, quoting Central Electricity Authority (CEA) data. Over half of the plants had stocks that would last fewer than three days. Meanwhile, over 80% had less than a week’s stock left.