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India Revives Coal Export Plans to Check Rising Pithead Stocks



By Ajoy K Das and Mariaan Webb

April 20, 2017 - With rising pithead stocks across the country, India is considering exports to cope with surpluses.


“The government is now looking for new consumers for the surplus coal,” Minister for Power, Coal and Mines Piyush Goyal said in an address to members of the media. “We are open to the idea of exporting coal; however to export we have to address the issue of quality . . . as pollution generated from Indian coal is higher,” he said.

Late last year, the Ministry of Coal started planning to enter international coal markets, starting with shipments to neighbouring Nepal and Bangladesh. However, even a modest starting offer of 10 million tons did not find many takers in the two countries, which were averse to buying low-grade, high ash content Indian coal. As such, within four months of planning to start exports, the government jettisoned the plan.


However, with the government once again keen to explore export options to check mounting stocks, miners, including Coal India Limited (CIL), are increasing beneficiation volumes as a prerequisite to woo international buyers of Indian coal.


It has been pointed out that attempts to export beneficiated coal will be a “challenge” considering limited domestic beneficiation capacity of not more than 70 million tons a year.


Among other consumers that the government is expecting to woo in order to tackle the problem of plenty are thermal power plants which are currently resorting to imports.


According to data sourced from the Central Electricity Authority, total coal imports between April 2016 and February 2017 were estimated at about 61 million tons. Of this, 19 million tons were imported by 29 power companies for blending with domestic coal, while 11 other companies imported 42 million tons for undiluted feeding into their plants.


CIL officials said that if domestic miners were able to replace at least half of the imported volume with domestic coal, it would mitigate the rising problem of pithead stocks.


In March 2017, pithead stocks had mounted to 69-million tons, up from around 49 million tons in May 2016.


A senior official in the Coal Ministry further said CIL did not have to increase the rate of coal production.


Citing a recent communication from the Ministry of Power, he said domestic thermal power plants would require an estimated 584 million tons of coal during 2017/18.  Hence, he said that based on past trends wherein thermal power plants accounted for about 75% of domestic coal consumption, total coal consumption during the year would be 780 million tons, which could be adequately met at the current rate of production by domestic miners.