Coal Age

NOV 2014

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Limbo and crisis are the most oft refrains used to describe mining in India these days. It's especially ironic for the mining sector, which boasts the fifth largest reserves in the world and remains the third largest producer in the world. Despite the height on the pecking order of endowment, India's coal production per- formance has been lackluster even with coal accounting for more than 53% of the country's primary energy needs. Coal pro- duction during 2013-2014 was pegged at 565 million metric tons (mt), barely 1.7% higher than 556 million mt recorded in the previous fiscal year. The disparity between available resource and performance over the long term was coming home to roost with India's import dependency increasing rapidly and the country emerging as the second biggest coal importer after China. While the Indian government does not release official coal import forecasts, industry analysts said that total thermal coal import for power generation was expected to grow 11% in the current fiscal year (2014-2015) to 150 million mt. Data sourced from Indian Ports Association (IPA) representing ports with coal han- dling facilities showed that during 2013- 2014, coal imports were recorded at 105.7 million mt, up 17% from 86 million mt in the previous fiscal year. "The coal sector will not be able to achieve the targeted 8% average growth set by the government for the period 2012- 2017, and production targets will need to be revised downward in a review to be conducted before the end of the current year," said an advisor to the Ministry of Coal. He pointed out that even during the previous five-year period between 2007- 2012, production targets set by the gov- ernment had been missed persistently. Against government production targets o f 3 8 4 m i l l i o n m t , 4 0 5 m i l l i o n m t , 4 3 5 million mt, 460 million mt and 447 mil- lion mt, actual production fell short over the five years at 379 million mt, 403 mil- lion mt, 431 million mt and 435 million mt, respectively. In 2013-2014, Coal India Ltd. (CIL) pro- duced 562 million mt, registering a growth of 2.3% over the previous fiscal year while second largest coal miner Singareni Collieries Co. Ltd. (SCCL) produced 50 million mt, a negative growth of 5%. The Crisis The dismal performance is becoming more apparent. As of October, data sourced from the Central Electricity Authority (CEA), the Indian government's techno-economic advisory body for the power sector, showed that 60 of the country's 103 thermal power plants had coal stocks of less than one week's consumption, owing to shortfall in supplies from CIL. The total coal feedstock currently available with the thermal power plants had fallen to 7.2 million mt during October, the lowest stock in the last 25 years, according to the CEA. If existing plants were in dire straits, new projects too were hanging fire from lack of coal linkages. According to Piyush Goyal, Indian minister for coal and pow- er, 12 new power projects entailing an investment of $5.86 billion with aggre- g a t e g e n e r a t i n g c a p a c i t y o f 7 , 2 3 0 M W w e r e r e a d y f o r c o m m i s s i o n i n g , b u t stranded in absence of long-term coal s u p p l y a g r e e m e n t s w i t h c o a l m i n i n g companies. i n d i a n c oa l m i n i n g B Y A J O Y K . D A S , C O A L A G E C O R R E S P O N D E N T 48 www.coalage.com November 2014 Indian Coal Mining Business: A State of Limbo The government, which controls the mines and transportation, has created an energy crisis for a country blessed with one of the largest coal reserves Dragline mining in India.

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