IEA sees India coal imports rising til 2023; Here is what it says.

The International Energy Agency (EIA) said inadequate rise in coal production on the back of higher demand growth in India would push imports higher till 2023. India’s import of thermal coal — mainly used in electricity generation—is seen to expand 2.2% per year, from 119 million tonne of coal equivalent (Mtce) in 2017 to 135 Mtce in 2023. The Paris-based intergovernmental organisation also estimates by 2023, India to be the world’s primary importer of metallurgical coal, which is used in steel production. Metallurgical coal (coking coal) import is seen growing at a compound average annual growth rate (CAAGR) of 7.2%, from 49 Mtce in 2017 to 74 Mtce in 2023.

During the first seven months of current fiscal, India imported 136.6 MT coal, registering a year-on-year growth of 14.9%. IEA’s recently launched market report titled “Coal 2018”, reviewed by FE, also said that India demonstrates the largest absolute increase in coal consumption over the forecast period, with demand rising by 146 Mtce to 708 Mtce in 2023.

India is deficient in coking coal and imports of coking coal are inevitable. The IEA said that economic growth and infrastructure development in India would push up coal consumption in steel and cement production.

During April-November, 2018, all India coal production was 433.9 MT, recording a 9.8% year-on-year growth. The all India raw coal production has increased from 565.8 MT in FY14 to 676.5 MT in FY18. However, “progress observed in coal production and transportation will not be sufficient to reduce imports,” IEA said. The report recognised state-owned Coal India Ltd’s (CIL) efforts of increasing production efficiency, noting that how the world’s largest coal miner is shutting down its low-yielding underground mines and focusing more on the more lucrative open-cast mines.

A senior coal ministry official recently told FE that the government’s effort to increase domestic coal production and power demand falling with the onset of winters are expected to put a check on coal imports. “The final quarters are usually the time when coal production peaks, and we are banking on that to replace the incremental imports,” another ministry official had said.