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India wants its state miner Coal India Ltd. to ramp up production to rein in imports, amid global shortages of the fuel that have added urgency to efforts.

India is aiming to eliminate imports of thermal coal by 2024, said federal Coal Secretary Anil Kumar Jain. The government also wants to improve supplies for power plants and a host of other industries, including aluminum, cement, bricks and paper, and the Kolkata-based company has been under pressure to rise to the task.

“We can keep pushing our companies to over-deliver," Jain said in a text message, commenting on a letter he wrote to Coal India’s chairman Pramod Agrawal late last month, asking the company to accelerate output. 

During the start of the year, Coal India battled swelling inventories, as power plants curtailed purchases because of subdued electricity demand. The ministry wanted the company to continue producing nevertheless, as it targeted a substantial reduction in imports during the fiscal year, Jain said.  

India imported 215 million tons of coal in the year ended March, down almost 14% from the prior year, according to the coal ministry. Imports accounted for nearly a quarter of total demand.   

India is now facing a coal crunch that its power minister said could drag on for 5-6 months, as heavy rains flood local mines and cost of imported coal soars. Several plants that burn overseas coal have idled capacity, as generation is not sustainable at such high fuel prices. 

Fuel inventories at plants plummeted to an average four days at the end of last month, down from 13 days at the start of August, government data show. Nearly 45% of the country’s 202 gigawatts coal power fleet had stocks of three days or less. 

The depleting inventories stoke fears of an electricity crisis like the one being witnessed in China and parts of Europe. 

“We’re going to see a renewed impetus on domestic coal production from here on," said Rupesh Sankhe, vice president at Elara Capital India Pvt. in Mumbai. “This crisis will bolster the idea of self-reliance on coal."  

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