India’s private companies could start developing coal mines with an annual capacity of 15 million tons by the end of March, the country’s coal minister told Reuters, a move that would put an end to the near-monopoly of state-run Coal India.
Last month, Prime Minister Narendra Modi officially launched an auction of 41 coal mines to companies, including those in the private sector, with an annual production capacity of nearly one third of the national total output.
“This year by the end of March, if everything goes well, 15 million tonnes we will start this year,” India’s Coal Minister Pralhad Joshi told Reuters in a telephone interview late on Tuesday.
India’s coal consumption decreased by 3.3 per cent to 958 million tons by the end of March 2020 and is expected to fall further this fiscal year due to coronavirus, Joshi said.
Some analysts expect the demand for coal to be tidy, given the increased use of renewable energy in electricity generation.
Ratings Agency Moody’s Indian Unit ICRA said on Tuesday it expects domestic demand for coal to grow by 2.9 percent between fiscal years 2021 and 2027, nearly half of the previous seven years.
But Joshi expects the demand to bounce back.
“We have to be prepared for a national coal consumption of 1,300-1,400 million tonnes of coal by 2023-24 including coking coal,” he said, adding he expected Coal India to produce 1 billion tonnes and the private sector to account for the rest.
India, the world’s second-largest consumer and producer of fuel, saw imports rise by almost 7% to 251 million tons this year, with production falling for the first time in more than two decades.
