India’s coal export plans heading for the backburner

KOLKATA (miningweekly.com) – India’s nascent plans to export its way out of a domestic coal glut may be heading for the backburner.

Domestic coal miners, primarily Coal India Limited (CIL), are failing to make much headway with plans to export their coal, with few buyers in neighbouring countries for the low-grade, high-ash content coal that is on offer.

At the same time, the Coal Ministry is reconsidering its position on exports and is looking to back off from pushing too fast into export markets, on the grounds that the current coal glut may be a short-term trend.

Some government policy makers have expressed the view that, should there be a sudden revival of demand from the domestic thermal power sector, there could be sharp drawdown on the surplus, placing commitments to international markets at risk.

Media reports in Bangladesh have stated that that country’s Energy Minister had ruled out any coal purchases from CIL.

Bangladesh, which is planning to float global tenders for coal, is keen to clinch deals with miners in South Africa, where it will secure higher grade coal than what is available from India, the Minister has been quoted as saying.

India’s Coal Ministry has interpreted the comments as Bangladesh voicing its disinterest in sourcing Indian coal for a proposed 1 320 MW thermal power plant, which is being constructed under a bilateral agreement between the two countries.

In a statement last month, CIL said it had achieved coal production of 50-million tons, or about 93% of its target for the month, and offtake agreements of 48-million tons, or about 97% of its monthly target.

During the April to November period, the miner produced 323.57-million tons, achieving 90% of the target set by the Coal Ministry, with offtake of 340.32-million tons.

Among the triggers for optimism in the Ministry that the glut might be easing was the fact that CIL pithead stocks were down 39-million tons in November, from 53.9-million tons in April.

At the same time, coal stocks with thermal power plants were also on a downward curve, indicating that their offtake from the miner would rise over the next few months.

Government data indicated that in November coal stocks with thermal power plants were down to 19-million tons, against an estimated demand of 30-million tons, which would prompt these power plants to make fresh offtakes from CIL.