Lockdown: India's avoidable coal imports to be brought down to zero

India is planning to bring 'avoidable coal imports' to zero by 2023-24 amid abundance of fuel stock due to subdued demand by the power sector in the wake of the coronavirus-driven lockdown, according to a source.

The source, on the condition of anonymity, said the "government is planning to bring down to zero the country's avoidable coal import by 2023-24".

This comes at a time when the country's coal imports increased marginally by 3.2 per cent to 242.97 million tonnes (MT) in the just-concluded financial year 2019-20. Of the total, 110 MT of fuel was unavoidable import, while the remaining nearly 130 MT is avoidable import, the source said.

The government is planning to reduce "this avoidable coal import by 25-30 per cent in the ongoing fiscal', the source said.

This unavoidable coal import consisted of coking coal and coal with low-ash content.

According to industry experts, India does not have much coking coal, which steel plants use to mix into iron to produce steel, and so has to import.

"The coastal power plants have boilers which are designed in such a way that they use low-ash coal," the source said.

Coal Minister Pralhad Joshi recently wrote to chief ministers of all states asking them to not import dry fuel and take domestic supply of fuel from state-owned CIL, which has the fossil fuel in abundance.

To give a boost to coal demand hit by the ongoing lockdown, the government has also announced a slew of measures like increased dry fuel supply for linkage consumers.

The ministry also approved relaxation in quantity of coal for linkage consumers.

It also announced that no performance incentive shall be levied on power consumers if CIL supplies more than the upper limit of fuel supply agreement (FSA). About 80 per cent of India's domestic coal production comes from CIL.

CIL recorded an all-time high coal output of 84.36 MT during March 2020, registering 6.5 per cent growth compared to 79.19 MT it produced in March 2019.

Coming back strongly in the last quarter of 2019-20, CIL clocked a robust 9.9 per cent production growth compared to same quarter of 2018-19.

The firm produced 213.71 MT of coal during January-March 2020, an increase of 19.26 MT in volume terms as compared to 194.45 MT in the fourth quarter of 2018-19.