India to cut dependence on coal imports

New York

INDIA has some bad news for the world's struggling miners: It does not want foreign coal.

"I'm trying to find new reserves so I can remove my dependence on imports," the country's coal and power minister Piyush Goyal said in an interview last Friday at Bloomberg's headquarters in New York. Asked when India might stop importing the power plant fuel altogether, Mr Goyal said: "I wish it was yesterday. Maybe two or three years."

In recent years, India has been considered a possible saviour for beleaguered coal miners including Peabody Energy Corp that have suffered amid slowing Chinese demand and plummeting commodity prices. But it may be no white knight. In 2015, it increased its own production of the power plant fuel and slashed imports in "a big way", according to Andrew Cosgrove, a Bloomberg Intelligence analyst.

That trend will probably accelerate in coming years as India seeks to increase its annual electricity production fourfold by 2030, to as much as 4.5 trillion kwh from 1.1 trillion kwh at present, Mr Goyal said. State-owned Coal India Ltd, the world's biggest coal producer, plans to increase annual production to about one billion tonnes in the next four years, while India's overall domestic coal output could climb to 1.5 billion tonnes, he said.

The company, which produces more than 80 per cent of India's coal, reported record production and dispatches during the year ended March 31, after faster land purchases and government approvals led to the opening of new mines.

India is developing new shipping routes and adding railroad capacity to transport domestic coal from mining areas to coastal power plants in hopes of further reducing its reliance on foreign coal. BLOOMBERG