Coal India Ltd, the world’s largest coal miner, plans to directly export output to neighbouring countries, according to sources and documents seen, after decades of exclusively supplying state domestic consumers.
The state-run company plans to export to Bangladesh, Nepal and Bhutan. According to a draft policy sent to the secretary of India’s coal ministry and reviewed. As a part of India’s “neighbourhood first” policy, which seeks to counter China’s growing economic influence in South Asia.
The proposal was presented at an internal board meeting on corporate strategy in October 2020 and was confirmed by Coal India’s chairman this week. Although a critical coal shortage in India now means the first such shipments would be unlikely until the end of this year.
“We would have ideally wanted to start exporting this financial year (ending March 2022). If not the energy crisis,” Coal India Chairman Pramod Agrawal told, noting the current priority was to address domestic demand. India – which relies on coal for nearly three quarters of its electricity supply. It is yet to fully recover from the crunch that forced power cuts. Which lasted up to 14 hours a day in some northern states.
Compounding those woes, international coal prices have soared due to a surprise temporary export ban by top exporter Indonesia. And large purchases from European buyers concerned that any invasion of Ukraine by Russia could sever gas flows to Europe.
Coal India, which produces 80% of India’s coal, aims to ramp up output to 1 billion tonnes by 2024. India is the second largest producer, consumer and importer of coal. Coal India has previously exported small quantities to neighbouring countries on an ad-hoc basis, but never in commercial bulk.