Coal output to miss govt’s target of self-sufficiency: Report

India will remain in coal deficit up to 2020, although the deficit will narrow from 191 million tonnes in 2016 to 163 million tonnes by 2020, according to a BMI Research report


India is eyeing 1.5 billion tonnes of coal production by 2020, of which 1 billion tonnes would come from Coal India. Photo: Bloomberg
India is eyeing 1.5 billion tonnes of coal production by 2020, of which 1 billion tonnes would come from Coal India. Photo: Bloomberg

New Delhi: India’s coal output will miss government’s ambitious target of self sufficiency on the back of delays in opening up of commercial mining to private sectors and slow approvals for new state miners, said a report.

The country is eyeing 1.5 billion tonnes of coal production by 2020, of which 1 billion tonnes would come from Coal India.

According to a report by BMI Research, the country will remain in coal deficit up to 2020, although the deficit will narrow from 191 million tonnes (MT) in 2016 to 163 million tonnes by 2020.

However, India will surpass the US as the world’s second largest producer of coal during 2016-20, increasing the market share from 9.8% in 2016 to 12.7% by 2020 as Coal India ramps up output to meet the domestic power demand of the country, the report said.

It said India will post strong production growth in aluminium, refined copper and refined zinc sectors over the coming years. Among minerals, the country will ramp up production of coal, bauxite, iron ore and zinc ore up to 2020, steadily increasing its global market share of these commodities, BMI Research said.

Low operating costs in India, improving commodity prices, strong economic growth and demand from manufacturing sector will boost production and consumption of industrial metals in general.

India will be the fastest growing major economy over the coming years, with real gross domestic product (GDP) growth averaging 6.8% over 2016-2020.

Manufacturing sector’s nominal growth will accelerate from 5.6% in 2016 to 10.3% by 2020. Looking at production balance trends, India will remain generally self-sufficient, continuing as a net exporter of aluminium, refined zinc and refined copper, while remaining a net importer of steel, refined nickel, refined tin and refined lead.

While its refined copper surplus will grow over the years to 2020, zinc and aluminium surpluses will narrow as consumption will expand at a faster pace than production.

In terms of iron ore, India will continue to be a net exporter. Coal India accounts for over 80% of the domestic coal production.

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