The dynamics of importing coal: lessons for India

The Indian industrial sector has slowed down and reviving it is an immense challenge, given problems in the availability of power. Many states across the country have been facing daily power cuts of upto six hours; the situation is only worsening despite measures being taken by the government such as sprucing up coal supplies. There was power generation loss of some 5.3 billion units in the period of April to October, 2011, due to coal supply shortage. The country's largest miner, Coal India limited (CIL), revised its production target in 2011 to 440 metric tonnes (MT) from the previous 452 MT. This clearly shows that CIL will not be able to meet its production target in the coming year, either. Most of the companies are looking to source coal from other countries either through fuel supply agreements or buying coal assets in coal-rich countries. Even the Coal Ministry of India has indicated that the importation of coal is being considered as an option for power production.