Coal demand set to rise to 787 million tonnes, lifting imports

NEW DELHI (Reuters) - India's coal demand is expected to rise 6 percent to 787 million tonnes this financial year, the country's coal minister said, which could lift imports close to 200 million as local supply falters.

Stiff public opposition to land acquisition, environmental red tape and inherent inefficiencies of behemoth Coal India , the world's largest coal miner, have made the country a big importer of coal despite sitting on plentiful reserves.

India's total output has grown at an annual rate of about 2 percent over the past few years, reaching 566 million tonnes in the year to Mar. 31, when demand totalled 739.4 million tonnes.

"Over a period of one or two or three years we are confident that we will bring the position to a better situation," Coal and Power Minister Piyush Goyal told reporters, adding that the aim was to increase production by up to 8 percent every year.

Former banker Goyal - handed the key ministries by new Prime Minister Narendra Modi to fulfil his pledge of power to all - last week pushed a Coal India unit into opening its first mine in decades, work on which was started ten years ago.

On Thursday he urged lawmakers to help the government to acquire land faster for new mines and to build railway lines to connect remote pits with fuel-hungry power plants.

Goyal has also asked power companies to raise imports, which hit 169 million tonnes in 2013/14, until local supply picks up.

Coal India and closest rival Singareni Collieries, which together account for more than 90 percent of India's coal production, plan to produce 561.5 million tonnes this year.

This suggests that imports could be much higher than last year, benefiting suppliers such as Indonesia, Australia, South Africa and the United States.

(Reporting by Krishna N Das; Editing by David Goodman)