India 2011/12 coal import needs may jump to 114 mln T

NEW DELHI Tue Sep 27, 2011 3:12pm IST

Laborers work in a railway coal yard on the outskirts of Ahmedabad June 15, 2010. REUTERS/Amit Dave/Files

Laborers work in a railway coal yard on the outskirts of Ahmedabad June 15, 2010.

Credit: Reuters/Amit Dave/Files

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NEW DELHI (Reuters) - India could import about 114 million tonnes of coal in 2011/12, up by over a third from the previous year, mainly from Indonesia and South Africa to help prevent power stations and factories in Asia's third-largest economy from slowing down.

Coal Minister Sriprakash Jaiswal said on Tuesday India's coal demand was seen at 696 million tonnes in 2011/12 against an expected local output of 554 million tonnes. State-run Coal India, the world's largest coal miner, has stocks of about 28 million tonnes, reducing the overall shortfall.

"However, stock liquidation is subject to availability of (rail wagons) ... Measures proposed to step up production are subject to different statutory approvals and availability of land," Jaiswal told a coal conference in New Delhi.

India is home to 10 percent of the world's coal reserves, trailing only the United States, Russia and China, but a shortfall from local supplies has grown rapidly with an increase in coal-fired power plants and steel makers.

Domestic output has been crimped by hurdles over environmental clearances and land acquisition, as well as low investment, forcing sharp downward revisions of output targets that could drag on India's nine percent growth plans.

India's gargantuan appetite for coal has meant Coal India is the country's second most valuable company with a record initial public offer last year raising about $3.5 billion. Yet costly imports seem the only way now to meet the country's coal demand.

India bought about 82 million tonnes of coal in 2010/11, government data, which is often slow to compile, showed. The Indian coal industry puts that figure at about 102 million tonnes, including some 70 million tonnes of the thermal variety.

It was not clear how much of 2011/12 imports could consist of the costlier coking coal.

"The gap in demand and supply from domestic sources would exceed 200 million tonnes" by 2017, at the end of a five-year plan period, Jaiswal said.

"We are aware that coal is the mainstay of India's energy needs and our dependence on the same is likely to continue for quite some time."

Earlier this year, Jaiswal said a concerted effort to remove regulatory hurdles could help boost India's coal output by 7-8 percent in 2011/12, though the country would remain a major importer.

Coal accounts for more than 60 percent of India's energy use and, despite a push to use more greener forms of fuel, the country will depend on it to reduce black-outs and halve its peak-hour power deficit of nearly 14 percent.

(Editing by Jo Winterbottom and Miral Fahmy)

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