India, the world’s third largest coal consumer, is one of the most appealing market for Australia’s thermal coal to meet its increasing energy requirements, according to a new report.

According to ‘The Coal in India 2019” report, prepared by the Australia’s Office of the Chief Economist, Australia is not a significant supplier of thermal coal to India despite India’s imports growing by 84 million tonnes in the past five years. The report said that India was the world’s third largest coal consumer behind China and the United States; and the share of coal in India’s electricity mix was rising.

  1. Indonesia was main supplier for India for thermal coal while Australian exports were going to China, Japan and South Korea, the report said,
  2. The growth in Australia’s coal exports to India has coincided with the substantial rise in Indian coal imports, only exports of metallurgical coal to India have risen substantially.
  3. It said that there were a range of factors that had led to limited Australia’s thermal coal exports to India, particularly in the past five years including the Australian price which exceeded the level that Indian electricity companies, who were subjected to regulated prices, could profitably pay.
  4. Subsequently, India’s coal importers have sourced supplies from the low-cost producers in Indonesia that supply lower energy content coal and have lower shipping costs for delivery to India.
  5. However, the energy content premium that Australia’s coal typically attracts is getting smaller and key benchmark prices for Australian and Indonesia coal are getting closer.
  6. It highlighted the India’s energy giant Adani’s 16.5 billion dollar Carmichael coal mine and rail project in Queensland which was the most advanced project could help India. At its full capacity, it could produce up to 60 million tonnes of thermal coal a year.
  7. Most of the coal produced from these projects is expected to be destined for export markets, primarily India, although the potential to supply the domestic market is also being considered, the report noted.
  8. The report further noted that Adani’s Carmichael mine and GVK’s Alpha mine were two advanced projects could provide long term reliable supplies of coal to meet the growing energy needs of India.
  9. India’s desire to improve the productivity of domestic coal mines through advanced technology may present an opportunity for Australia’s Mining Equipment, Technology and Services Sector (METS), the report said.
  10. The report also identified India’s interest in Australia stating that Coal India Ltd (CIL) was already interested in working with Australian companies to upgrade the technology employed in their coal sector.
About CIL
  1. Coal India Limited (CIL) is an Indian state-controlled coal mining and refinery company headquartered in Kolkata, West Bengal, India and the largest coal-producing company in the world and a Maharatna company. The company contributes to around 82% of the coal production in India.
  2. Coal India Limited (CIL) produces coal through seven of its wholly owned subsidiaries. These are Eastern Coalfields Limited (ECL), Bharat Coking Coal Limited (BCCL), Central Coalfields Limited (CCL), Western Coalfields Limited (WCL), South-Eastern Coalfields Limited (SECL), Northern Coalfield Limited (NCL), and Mahanadi Coalfields Limited (MCL).