India could reduce its dependency on imported coal through concerted efforts by allowing more private players to come in through commercial mining and by focusing on improving the transport, logistics and distribution infrastructure, said Atanu Mukherjee, Co-chairman and Chief Executive Officer, Dastur Energy and MN Dastur. Coal imports, which are currently hovering around 240-250 million tonne (mt) each year, could be brought down to around 150 mt over the next four-to-five years, he said.
Of the 240-250 mt imported stock, around 50-60 mt is metallurgical coal which is used for production of steel and has to be brought in from outside as India does not have the necessary resource. Another 50 mt of low ash coal import is unavoidable. The remaining 150 mt or so is essentially thermal coal, which can be procured domestically by ramping up productivity of existing mines and bringing in more private players through commercial mining route, he said. CIL currently produces close to 600 mt of coal, another 200 mt comes from captive mines and the rest is imported.
As the share of private mining goes up and the efficiency of the distribution system and production of coal improves, imports can be brought down. “With more companies apart from CIL participating and with improvement in transport and logistics infrastructure, we should be able to bring this down significantly over the next few years to say 50-60 mt of thermal coal (and 100 mt of metallurgical and low ash coal, so a total of about 150 mt of imports). There needs to be concerted efforts,” he said.
Reliance on coal to stay
India’s demand for coal is not likely to go down as energy needs of the country are huge.
The country’s power consumption is only one-third of global average and with the industry and retail consumption growing, there would be increasing demand for affordable baseload power from coal.