Coal India Lowers Output Target for 2011-12, Plans Imports

March 10, 2010, 12:19 pm | Admin

From Bloomberg

By Natalie Obiko Pearson and Madelene Pearson

March 10 (Bloomberg) — Coal India Ltd., the nation’s monopoly producer of the fuel, said output will be less than expected in 2011-2012, increasing the need for imports by the world’s second-fastest growing major economy.

“The production target has been reduced from 520 million to 486 million tons” in that year because of delays in developing mines, including getting environmental permits, A.K.

Sarkar, director of marketing, said today at a conference in Mumbai.

The nation’s demand for coal is 335 million metric tons this year and is expected to rise to 360 million tons in 2010-11 and 721 million tons the following year, he said. Part of the requirement can be met with imports, Sarkar said.

About 75 percent of India’s power output is coal-fired, Finance Minister Pranab Mukherjee said in his budget speech on Feb. 26. India plans to almost double electricity generation capacity by 2012, by when the shortage of coal will exceed 200 million tons.

India will need to consider diversifying its fuel mix away from coal and improve efficiency in the power sector, Sarkar said.

The government has set a target of importing 35 million tons of coal in the year starting April 1 and 81 million tons the following year, Sarkar said later in an interview.

Coal India may issue an international tender to import 10 million tons of the fuel as early as April, he said in the interview.

Coal India acquired two coal exploration blocks in Mozambique last year and is considering 10 proposals in Australia, Indonesia and the U.S. to secure coal through strategic alliances, which may include taking stakes in overseas mines, Sarkar said.

 

–Editors: John Chacko, Clyde Russell.

To contact the reporters on this story:

Natalie Obiko Pearson in Mumbai at +91-22-6612-9107 or npearson7@bloomberg.net; Madelene Pearson in Melbourne at +61-3-9228-8720 or mpearson1@bloomberg.net.

To contact the editors responsible for this story:

Clyde Russell at +65-6311-2423 or crussell7@bloomberg.net; James Poole at +65-6212-1551 or jpoole4@bloomberg.net.

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