Coal India has more coal for e-auction than demand - Total coal allocated at e-auctions during the first five months is 20.10 million tonnes

The largest coal mining company of the country, Coal India Ltd (CIL), has more coal to offer through e-auctions than the actual demand, according to a company official. "The total coal allocated at e-auctions during the first five months (April to August) of the current fiscal is 20.10 million tonnes, against an offered quantity of 50.29 million tonnes," the source said requesting anonymity. This indicates that the coal major has more stocks to offer than the actual demand, which, however, is rising, the official said. The situation was just the opposite last fiscal, when 13.05 million tonnes were allotted for e-marketing, against an allocated of 10 million tonnes.


The demand rose after CIL reduced the floor price of coal sold through e-auction from 30 percent over and above the notified price to five percent. CIL introduced e-auctions to make coal available to non-core sectors and traders. The coal for e-auctions is sourced from the subsidiaries of CIL - Eastern Coalfields, Bharat Coking Coal, Central Coalfields, Northern Coalfields, Western Coalfields, South Eastern Coalfields, Mahanadi Coalfields and North Eastern Coalfields.

Coal shortage to continue in India

The shortage of coal will continue in India in near future. Ernst & Young (E&Y) has prepared a plan on proper supply of coal in the domestic market. It has recommended increase in the domestic coal production and contract mining to tame the shortage. It has also stressed the need of inclusion of private sector in the mining process along with foreign direct investment.

The report is released by Power Minister Sushilkumar Shinde at the India Coal Summit 2008 under the title ‘Coal — unearthing its potential in India’. The report has forecasted increase in domestic production by 680 million tonnes by 2012. The demand for fuel will increase in the near future to 10 percent. The report has pointed out that the demand would be balanced through import of fuel by 2012

CIL chairman and managing director Partha Bhattacharya said the demand for coal is increasing in the market. The company would import 4 million tonnes (MT) of coal besides increasing the production capacity.

Global warming concerns may blunt India's coal edge

The coal advantage that India and China have, would be offset by global warming concerns over the usage of the cheaper fossil fuel. According to a report by Standard & Poors, China accounts for 40% of total world coal usage and has already overtaken the US in carbon emissions as a result.

The report says India and other emerging Asian economies have an advantage that they depend more on coal and less on oil. “Although liquids are 37% of world energy production, they are only 29% for non-OECD Asian production. Coal is 55% of current Asian energy production compared to 27% of the world,” the report said. Although China is likely to increase nuclear production eight-fold by 2030, it will still depend largely on coal.

According to the US Energy Information Agency (EIA), non-OECD Asian demand will rise at 3.2% annually to 2030, a total rise of 119%. About half of the increased usage is expected to come from coal; by 2030 Asia will use nearly double the amount of coal the OECD uses. “But, although the use of liquids will rise slightly less than total energy use, non-OECD Asia will still account for 73% of rise in oil use over the period.”.

Developed countries in Asia will, however, record subdued growth in demand, which is expected to rise by only 0.7% per year. Japan will remain one of the world’s most energy-efficient nations. “With population growth negative and GDP growth soft, energy demand will be nearly flat, up an average of only 0.1% per year. Korea, Australia and New Zealand, however, will still increase energy usage over the period,” the report said.

According to S&P, India is an inefficient user of energy. The rating agency has highlighted that the practice of controlling electricity and petrol prices has left the country’s trade position exposed and made the overall energy efficiency lower.