India`s appetite for coal expected to rise sharply

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Coal powers more than half of India's electricity plants and demand for the commodity is expected to rise sharply as the third-largest Asian economy expands at a fast clip.

New steel and cement industries coming up in India are also hungry for the 'black gold', pushing up its imports.

Here are some facts, projections and issues surrounding India's coal industry:

Basic facts

India produced 492.95 million tonnes of coal in 2008/09, up 7.8% from 457.08 million tonnes in the previous year.

Imports of coal were 59 million tonnes in 2008/09, against 49.7 million tonnes in the previous year.

Coking coal, used mainly in steel, is mostly imported from Australia. Non-coking coal that is consumed by power and cement is imported from Indonesia and South Africa.

There are 556 coal mines in India, mostly owned by the government and located primarily in east and south central regions of the country.

State-owned Coal India Ltd, with its 7 subsidiaries, is the largest miner holding 75% of India's coal market.

Projections, Issues

India's coal production is expected to reach 675 million tonnes by 2012, with 459 million tonnes available for power firms.

Coal imports will continue to get bigger with acquisitions and collaborations seen with coal mines in Australia, Indonesia and Mozambique.

Import requirement is seen at 135 million tonnes by 2012, but it may be hampered by congested ports and problems of rail linkages from ports to plants.

SOURCES: Ministry of Coal, Coal India Ltd, Karvy Stock Broking.