Coal deficit may not go away till 2020.

Despite the problem of plenty, India may continue to suffer from deficit in coal requirement due to delays in opening up of commercial mining to private sectors and slow approvals for new state miners, a leading research house has commented.

According to a report by BMI Research, an arm of global rating agency Fitch, India will remain in coal deficit up to 2020, although the deficit will narrow from 191 million tonne (mt) in 2016 to 163 mt by 2020.

The dichotomy between lack of demand for domestic coal, which mainly comes from Coal India, and the continued requirement to import the fuel mainly is due to quality and operational issues, industry experts pointed out.

Earlier this year, Indian government opened up commercial mining in India by allocating states mines for merchant mining with 16 mines with an estimated annual capacity of 40 mt being earmarked.

Commercial mining would go a long way in improving quality of coal that would replace imported coal.

And with domestic production increasing, import is fast getting replaced.

India imported 181.91 mt of coal in fiscal 2016 spending Rs 79,378 crore.

The scenario was worse in fiscal 2015 when the country imported 216.17 mt paying Rs 1,07,448 crore.

This year, imports would be much less as country's largest power producer has decided to full stop its imports.

"Due to the improvement in supply of coal against contracted quantity from Coal India, the consumption of imported coal reduced by about 80% during first quarter of the current year over the corresponding quarter. Supply of imported coal was only 0.56 mt in the current quarter as against 3.86 million metric tonne in the previous corresponding quarter," NTPC official had told analysts.

Sources said NTPC doesn't plan to import any more coal and may even tweak planned projects such as the one at Pudimadaka near Vizag that has 1,000 mw capacity to suit domestic supplies replacing equipment which were earlier designed for imported coal.

Source : dnaindia.com