World Energy Outlook 2007

southern coasts. At the high coal prices seen since the end of 2003, Indian coal
is competitive at most locations. However, for some Indian consumers,
imported coal is the only option since their quality requirements cannot be
met by local producers.
Coal Imports
India imported 36 Mtce of coal in 2005, covering 12% of demand. Steam and
coking coal imports were 18 Mtce each. Coal imports have grown strongly over
the past two decades. In 1990, India imported about 5.9 Mtce (5.1 Mt), but
imports have surged and, by April 2007, steam coal imports reached an alltime
monthly high of 3.3 Mt (McCloskey, 2007). Steam coal imports are
projected to rise further to 52 Mtce in 2015 and 139 Mtce in 2030; coking
coal imports are projected to rise more slowly to 45 Mtce in 2015 and
105 Mtce in 2030 (Figure 17.10). Overall the share of imports in Indian
primary coal demand increases from 12% in 2005 to 28% in 2030.
There is inevitably considerable uncertainty surrounding coal import
prospects in India though it is certain that the country will continue to rely
on imported coal for quality reasons in the steel sector and for economic
reasons at power plants distant from mines but close to ports. Because of the
poor quality of indigenous coal for steel production, coking coal imports are
expected to grow. Imports of steam coal for power generation are also set to
increase, as indigenous production lags demand and may not meet the
specifications required for more efficient operation of coal-fired power
plants. Port capacity has grown to meet rising imports and domestic
shipments, from 8 Mt in 1996/97 (Government of India, 2002) to around
70 Mt in 2007. Future imports are unlikely to be constrained by a lack of
port capacity.
Lower coal import tariffs have encouraged increasing quantities of steam
coal imports from Indonesia for power generation, 8 which are blended
with local coal to reduce ash and enhance energy content. Smaller
quantities come from China and Australia. Australia is the principal
source of coking coal imports into India, accounting for 81% of imports
in 2005, and it will continue to dominate in the future. Imports of
Chinese coking coal are likely to decline as China restricts its exports to
meet domestic demand. To secure future imports of steam and coking
coal, the Indian government has tasked Coal India to invest in overseas
mines, extending a practice established by the Indian steel industry.
Investments have been announced in Australia and Indonesia (McCloskey,
2007), with interest also being shown in Mozambique, Zimbabwe and
Kazakhstan (IndiaCore, 2006).
17
8. These amounted to 13.4 million tonnes in 2005.
Chapter 17 - Reference Scenario Supply Projections 509