India's thermal coal imports have increased to 12.6% in 2019 reflecting the second straight year of growth in shipments of the fuel despite attempts by the government to cut imports.

More about the news:

  • Thermal Coal: Imports of thermal coal which is mainly used for power generation jumped 12.6% to 197.84 million tonnes in 2019. 
  • Coking coal: Imports of coking coal used mainly in the manufacturing of steel fell marginally, following two straight years of increase. India imported 51.33 million tonnes of coking coal in 2019, down from 51.63 million tonnes in 2018, the data showed.
  • India’s coal imports from various countries in the April-December period:
    • Indonesia: Nearly 60% of India's thermal coal imports,
    • South Africa: 22%
    • Russia and Australia accounting for over 5?ch.
  • Reasons for higher coal imports in India:
    • Lower production by Coal India Ltd: According to traders coal imports grew largely due to lower production by Coal India Ltd, whose output fell for five consecutive months ending November due to the highest annual rainfall in 25 years and frequent outages including strikes by workers and locals.
    • Increased imports by Indian utilities: Imports rebounded after a three-year slide mainly due to increased purchases by an Adani Power plant in western India.

Significance of the coal statistics:

  • Coal is among the top five commodities imported by India, the world's largest consumer, importer, and producer of the fuel.
  • The current trend of higher coal imports may be bad news for the Indian government but they benefit international miners such as Indonesia's Adaro Energy, U.S. coal miner Peabody Energy Corp and global commodity merchants such as Glencore.

Imports of coal in India

  • As per the present Import policy, coal can be freely imported (under Open General Licence) by the consumers themselves considering their needs based on their commercial prudence.
  • Coking Coal is being imported by Steel Authority of India Limited (SAIL) and other Steel manufacturing units mainly to bridge the gap between the requirement and indigenous availability and to improve the quality. 
  • Coal-based power plants, cement plants, captive power plants, sponge iron plants, industrial consumers and coal traders are importing non-coking coal. 
  • Coke is imported mainly by Pig-Iron manufacturers and Iron & Steel sector consumers using mini-blast furnaces.

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