London — India's domestic coal sector continues to undergo reform as the country looks to meet its growing energy demand with thermal coal, while simultaneously replacing imports with domestic production, union ministers said Wednesday.
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Speaking at a cabinet briefing, minister for coal and mines Pralhad Joshi discussed state-owned producer Coal India's ambitious production targets as well as the recent move to allow foreign direct investment (FDI) in the country's coal blocks -- a first for the country.
Joshi described the act as a "historic decision" which would "ramp up coal production and drastically reduce the coal imports over time."
India's plans for its coal industry is to reduce the dependence in imports, Joshi said of the 235 million mt of coal, of which only 100 million mt was "non-substitutable."
India is already the world's second-largest coal importer, behind only China, and is playing an increasingly pivotal role in the global seaborne market given solid import growth in recent years as Chinese import demand appears to have peaked.
This means Coal India has considerable work to do to reach its target of 1 billion mt of production by 2023-24, and S&P Global Platts Analytics does not expect coal production to rise substantially over 2020.
In December, four coal blocks were auctioned to cement, sponge iron and power producers, which will add 4.8 million mt/year of coal production, Platts Analytics said, although this is not expected to have any material impact on thermal coal imports.
-- Joseph Clarke, firstname.lastname@example.org
-- Edited by James Leech, email@example.com