India may begin import of U.S. coal, minister says.

NEW YORK-- Growing power consumption will require India to begin importing coal from the U.S., with the country looking to form joint-ventures with U.S. mining companies, Indian Coal Minister Sriprakash Jaiswal said Thursday.

Jaiswal in an interview with Dow Jones Newswires said India hasn't yet begun importing from the U.S. thermal coal used to generate electricity. But Jaiswal and top officials from state-owned Coal India Ltd. traveled to the U.S. this week to meet with mining companies about setting up possible joint-ventures to supply power plants in India.

Jaiswal declined to name the companies with which Indian officials met. He expects an announcement in the next month or two. Peabody Energy Corp. /quotes/comstock/13*!btu/quotes/nls/btu (BTU 36.07, -2.42, -6.29%) disclosed last month that it has entered discussion with Coal India on possible joint-ventures.

"Imports are a must because we cannot fulfill the requirements of the country," Jaiswal said, adding that they have no shortage of funds to access foreign supplies.

U.S. exports of metallurgical coal to Asia, once rare, have become common in the last year. The higher-quality coal is used in steel production. Yet the much larger market for thermal coal has barely stretched to Asia. Jaiswal said thermal imports from the U.S. are likely in the next 10 to 20 years.

Jaiswal said India will increasingly need to import coal to keep up with the growing number of power plants, estimating more than 50% of the country's electricity will come from coal-fired generation. India is looking to add new plant construction along the coast and is encouraging the generators to use imported coal for a portion of their supplies, Jaiswal said. He added that government incentives are being discussed as a way to push companies toward importing supplies.

Source : MarketWatch.com