India's coal imports rise 20 percent to help fuel new power plants

 Indias coal imports rise 20 percent to help fuel new power plants

NEW DELHI (Reuters) - India's coal imports rose 20 percent to 105.8 million tonnes in April-October from a year earlier as power producers turned to Indonesia to help feed new plants, according to data from mjunction services, an online market operator.

Regulatory and bureaucratic delays in adding new mines and expanding existing ones have made India the No. 3 importer of coal, even though it sits on what BP (BP.L) ranks as the world's fifth-largest reserves. Imports leaped 34 percent to 137.56 million tonnes in 2012/13.

April-October shipments of thermal coal, used in power generation, jumped 28 percent to 81.6 million tonnes, according to mjunction services, which is jointly owned by Tata Steel Ltd (TISC.NS) and SAIL (SAIL.NS).

India's generation capacity increased in the seven months with the addition of new plants, while benchmark thermal coal prices fell, reaching their lowest levels in almost four years in September.

Imports of coking coal for making steel, the second-biggest contributor to total shipments, were nearly flat at 19.35 million tonnes.

The Indian government does not regularly release data on coal imports.

Its domestic production, 81 percent of which is from state-owned Coal India Ltd (COAL.NS), could fall short of demand by 155 million tonnes this fiscal year, according to the Coal Ministry. That could lead to a 13 percent rise in imports.

Coal India has fallen short of its production target for at least the past six years due to difficulties in obtaining environmental approvals, lack of railway access and other issues. Its April-December output of 319.2 million was 4 percent less than its target for the period.

The world's largest coal mining company launched its first tender in November, seeking to import 5 million tonnes of coal to supply power producers until March 2015.

The need for reform of the coal mining sector means India is expected to remain a big importer, with Coal India estimating a shortage of 350 million tonnes for 2016-17.

Indonesia could be the biggest beneficiary. It already accounts for more than 50 percent of India's coal imports, ahead of Australia and South Africa.

Several coal blocks allocated to companies from 1998 to 2009 for development are yet to start production. Recent court-mandated investigations into the allocations by the Central Bureau of Investigation (CBI) have further delayed mining.

The CBI said last week it had registered two cases regarding the alleged supply of low quality Indonesian coal by a private company to fuel power plants operated by National Thermal Power Corp (NTPC.NS).

(Reporting by Krishna N Das; editing by Jane Baird)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date: Jan 08, 2014 05:45:19 IST