No immediate plan to ban low-grade coal imports: sources

NEW DELHI (Reuters) - India will not restrict imports of low-grade coal, two sources in the coal ministry said, allaying fears that top thermal coal exporter Indonesia may see a fall in sales.

China, a top importer of Indonesian coal, is said to be drawing up plans to restrict imports of low-calorific value (CV), high-ash and high-sulphur content coal.

The move is aimed at curbing air pollution and protecting struggling domestic miners.

One source close to the matter said there were "no present plans" for such restrictions in India.

"But later if there are constraints on port capacities, environment concerns, then it cannot be ruled out," one of the sources said.

India places no restrictions on the imports of coal, which are brought into the country by traders and consumers.

Coal is the main source of energy in India, with thermal coal imports of 97.23 million tonnes in the 2012/13 fiscal year through March. About 80 percent of those shipments came from Indonesia.

Despite its abundant reserves of about 286 billion tonnes, coal production in India has failed to keep pace with demand from utilities for several years. That has led to chronic power shortages that have crimped economic growth.

Coal traders said they expect thermal coal shipments to the world's fourth-largest importer of the fuel to rise to 115 million-120 million tonnes in the year to March 2014.

India plans to add generation capacity of 88.54 gigawatts in the five years to end-March 2017, compared with almost 55 gigawatts in the previous five-year period.

Indonesia exports largely low-rank coal, the bulk of which has a calorific value in the 3,600-4,200 gross-as-received (GAR) range.

This is well below the 5,500 net-as-received (NAR) calorific value more typical of Australian or South African coal, as 5,500 NAR equates to about 5,800 GAR.

(Reporting by Malini Menon; editing by Jason Neely)