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Indian states to raise coal

imports to fill power gaps

INDIA THREE India state governments have said they record highs because of fears of a supply crunch
will buy in 10.5mn tonnes in the near future in a following the European Commission’s decision
bid to combat power cuts, potentially tightening to ban coal imports from Russia after its invasion
global coal markets and pushing up prices. of Ukraine.
The decision by the governments of Mahar- India said at the end of March that it was
ashtra, Gujarat and Tamil Nadu are the reverse of looking to increase its imports of coking coal
federal government policy to reduce cut imports from Russia, flying in the face of global trends
in a bid to support domestic production. to end purchases of Russian raw materials as the
The move emphasises the scale of India’s West imposes sanctions on Moscow.
power and fuel crisis, with coal inventories at Coal miners in South Africa, Australia and
their lowest pre-summer levels for at least nine Indonesia are likely to be the main beneficiaries
years and electricity demand seen rising at the of India’s buying spree, though those produc-
fastest pace in at least 38 years, Reuters reported. ers are already stretched by the recent spike in
Maharashtra State plans to import 8mn demand.
tonnes for “blending purposes,” while Gujarat Russia is also a possible supply source, but
will place orders for 1mn tonnes next week, the costs are already high and buyers are likely to
states’ energy officials told the federal govern- push for discounts, two traders said.
ment on April 13, Reuters said. Moscow, typically India’s sixth-largest sup-
The chairman of the Tamil Nadu govern- plier of coking and thermal coal, could start
ment-run utility said the state was targeting offering more competitive prices to Chinese and
importing 20% of its coal requirements, adding Indian buyers as European and other customers
that it had already placed orders to import 1.5mn spurn Russia because of sanctions.
tonnes, according to the meeting minutes. India’s federal government has also asked the
The three states are the country’s most state governments of Karnataka, Uttar Pradesh,
industrialised with the highest power demand, Madhya Pradesh, Punjab and Haryana to import
accounting for nearly a third of India’s electricity a total of 10mn tonnes of coal.
demand in 2021. While Punjab has committed to import
The cumulative imports planned by just the 625,000 tonnes, the other states have not detailed
three states would be higher than annual imports any plans, the meeting minutes showed.
by state government-run utilities for blending in Maharashtra’s expected 8mn tonnes of coal
at least six years. imports will be in addition to the 2mn tonnes
Coal-fired generation in India rose by 11% in it had already ordered, for which delivery is
2021, green think-tank Ember said in its Global expected on May 8.
Electricity Review. Figures from Paris-based commodity intel
The move by India, the world’s second-larg- firm Kpler said that in March, India imported
est coal importer, could lead to a further increase 1.04mn tonnes of Russian coal, the highest figure
in global prices, which are already trading near since January 2020.™

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