India’s coal demand could hit 1.5 billion tonnes by 2030

State-owned Coal India Ltd (CIL) will reach its production target of 1 billion tonnes by 2025-2026, CareEdge Ratings said in a report.

To meet India’s coal demand, which could reach 1.5 billion tonnes by 2030, the country will need to increase its production, he added.

CareEdge Research maintains its coal production estimate of 850–900 MT by the end of this fiscal year driven by Coal India Limited’s expected ramp-up in production to achieve the Ministry of Coal’s target to produce 1 billion tonne by FY26 and 1.5 billion tonne by FY30,” Tanvi Shah, director, CareEdge Advisory & Research, said.

Despatches to the power sector are likely to inch up further as demand from coal-based power plants remains high. While the imports have increased compared to last year, the government’s initiatives to increase domestic production would lower dependence on imported coal in the medium-long term. The international coal prices are expected to remain moderate in the near medium term due to soft global demand,” she added.

India’s coal production hit a new milestone of 698 million tonnes (mt) in the April-January period, up 16% year-on-year, driven by a 15.2% increase in production of Coal India, according to CareEdge.

The power sector continued to be the largest consumer of domestic coal, accounting for the total despatches of 609 mt during YTD FY23, an increase of 10.5% y-o-y,” it added.

According to the report, total coal imports increased by 25.6% year-on-year to 191.82 metric tons between April and December 2022, with imports being driven by non-coking coal.

He added that international prices for coal, the main global benchmark, had started to decline in recent months amid weak global demand.

Under the Coal Mines (Special Provisions) Act 2015 and the Mines and Minerals (Development and Regulation) Act 1957, Part VI of the Commercial Coal Mines Auction offered 141 mines of coal/lignite.

Auctioned in two parts, Part VI and a second attempt, Part V, a total of 96 bids were received. So far, 48 coal mines have been awarded in the first five batches, he added.