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Stopping thermal coal imports not feasible: Importers

November 13: A day after Coal Minister Piyush Goyal said India should be able to stop thermal coal imports in 2-3 years, leading importers said this would “neither be possible nor be justified”.

“I don’t think it is feasible. Even if domestic production crosses 1 billion tons, as the minister announced, we will not be able to meet the entire demand volume. This is so because demand over the next three years will significantly exceed that level,” said an official with Bhatia Coal, one of the largest importers of the material into India.

“Besides, given the low prices prevailing in international market and the difference in quality, imports are often beneficial for consumers from an economic point of view,” he said, adding that, “Indonesian coal of 3,800 GAR or 4,200 GAR are currently being quoted at around $30 and $35 per ton FOB, which is matching the prices of domestic coal considering the low ash content.”

For instance, the official explained, for a power plant located on the east coast and getting the coal from Northern Coalfields Ltd (NCL), it is more beneficial to import the same grade from Indonesia. “Indonesian coal prices are at rock-bottom levels and freight charges are also very low. The added benefit is the low ash level of the imported material,” he said.

However, port congestion may sometimes pose a problem, he added.

Another Kolkata-based trader importing Indonesian coal said: “Increased production growth may restrict the high growth in imports year-on-year, but will not be able to stop that altogether.”

“I don’t think we will see negative growth in imports in the next five years. Even if there is slowdown in thermal coal imports, coking coal imports will make up for that,” he said.