Coal India will launch two tenders for imported coal to reduce local shortages

The energy minister asked a state-owned mining company, which has little experience importing coal, to order shipments from overseas last week, as utilities suggested that multiple tenders would cause confusion and demanded centralized procurement via Coal India.

Indian officials are rushing to make more coal available to utilities as shortages in the July-September quarter are forecast to be 15% higher than initial estimates due to higher electricity demand forecasts.

The short-term tender will call for shipments of imported coal between July and December, while the medium-term tender will call for supplies between July 2022 and June 2023, said the official who asked not to be named.

The tender will be launched on a business-to-business (B2B) basis, as government-to-government (G2G) imports – suggested by the energy minister last week – will delay the process, officials said.

Coal India plans to launch the tender on June 7, officials said, adding that the decision to import had been approved by the company’s board on Thursday.

India has reversed policies to reduce thermal coal imports and plans to reopen closed mines to meet growing electricity demand. Coal represents almost 75% of India’s electricity production and Coal India produces 80% of domestic coal.

Decisions on import quantities, coal quality and port of destination will be made in consultation with the Federal Energy Minister, the official said, adding that the deadline for states to submit their requirements to the Energy Minister has been extended from May 31 to June 3. .

Importers will be free to choose the country from which they wish to import, officials said.

Indonesia, Australia and South Africa are the main suppliers of thermal coal to India, the world’s second largest coal importer despite being the second largest producer behind China.

In April, India faced its worst electricity crisis in more than six years due to rising electricity demand, although India’s record Coal production last year ended in March 2022.

Indian coal previously blamed lower production at import-based coal plants, adding that fewer imports were putting more pressure on domestic mining.

The energy minister estimates that the utility’s total need for imported coal to mix with domestic fuel will be 58.7 million tonnes this year, but the amount offered could be lower, one of the officials said.

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