India aims for big coal output boost next fiscal year

By Krishna N. Das

NEW DELHI (Reuters) - India is aiming to produce 700 million tonnes of coal in the next fiscal year, the country's coal secretary said, in what would be its biggest annual growth in output as it auctions off mines and state giant Coal India boosts production.

The country's coal output has been growing far slower than demand over the past few years because of Coal India's inability to expand its mines. Delays in getting environmental approvals, a lack of transport facilities and the company's inherent efficiencies are some of the reasons for the shortfall.

Anil Swarup said total coal output this fiscal year ending March 31 may marginally fall short of the 630.25 million tonnes target. He gave no reason but a strike at Coal India, which accounts for over 80 percent of the country's total output, affected operations in January.

"For this year efforts are being made but it appears they would miss it by a few tonnes," Swarup told Reuters. "Over the previous year it would still be a growth of around 7 percent which would be the highest in the past few years".

Government data backs Swarup's statement that coal availability in India, the third biggest importer of the fuel, has risen under the 10-month-old government of Prime Minister Narendra Modi. So far this year, a coal shortage has affected power generation of just 2.7 billion kilowatt hours, the smallest loss in at least four years.

Despite the rise in coal output, imports have stayed high as power companies add capacity. India's April-December coal imports were 156.35 million tonnes, government data shows, compared with 168.4 million tonnes for the whole of 2013/14.

The Modi government is aiming for self sufficiency and has fast-tracked environmental clearances for Coal India to help it open new mines. The government has also started an auction of mines after the Supreme Court ruled the previous method of selective allocation illegal.

A CBI court on Wednesday summoned former Prime Minister Manmohan Singh over accusations of criminal conspiracy and corruption in the illegal award of a coal field to aluminium firm Hindalco Industries . Singh and the company have denied the charges.

Swarup said the auctions will help private companies produce as much 90 million tonnes per year from the 42 working mines that are being sold off. Coal India will also raise its output.

(Editing by David Evans)