India Feeds Its Hunger for Coal

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". . .domestic output is not keeping pace with the demands of a fast-growing Indian economy."

India is hungry for coal and domestically there is neither the quantity nor the quality to feed the country's needs. Given ongoing high demand, the problem is expected to become even more pressing.

Following China's example, India is seeking new and distant coal locations in the U.S., Colombia and Russia to add to supplies from Indonesia, Australia and South Africa—sources of the recent past. American and Colombian coal is expected to be shipped to India before the end of the year.

India and China, the two fastest growing large coal-consuming countries, are looking for high-energy content coal at a low average cost that would justify the long-distance shipment. "It's good to know that India is a market into which we can sell our coal, even if it's not our first choice," a Colombian supplier said.

Industry sources say that over the last few months many global coal producers and traders have been assessing the prospects of the Indian market. In addition Europe is close to shipping surplus coal for the first time from Netherlands to India. In the export hubs of Amsterdam, Rotterdam and Antwerp, coal stockpiles are reportedly over 7 million metric tons (Mt) out of a total capacity of around 9 million Mt.

Coal accounts for over half of India's total energy consumption. About 70% of India's own coal production is already utilized for power generation while three quarters of India's electricity is generated from over 80 coal-fired thermal plants. India, the third biggest coal producer in the world, had reserves of 56,498 million Mt, or nearly 7% of the world total.

Yet, India's federal coal minister Sriprakash Jaiswal recently said coal imports are likely to rise 21% over the next year. The imports are needed because domestic output is not keeping pace with the demands of a fast-growing Indian economy.

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