International coal prices is likely move up further as
the world's largest producer CIL may have to import coal to meet the
increased demand of the power sector, an analyst said.
“The international price of coal is likely to go up as India's state-run
miner Coal India looks for procuring in the global market. The demand
for coal in India is likely to go up manifold as projects go on stream,”
the analyst with a global brokerage firm said.
A Committee of Secretaries, set up by Prime Minister Manmohan Singh to
sort out issues relating to the power sector, had asked CIL to sign Fuel Supply
Agreements with power plants that have already been commissioned or would go on
stream on or before March 31, 2015 for 20 years.
The move may provide relief to power plants. But it will be a Herculean task
for Coal India Ltd (CIL) to meet the additional obligations since its entire
production now gets exhausted to feed the power sector.
In the current situation, CIL's only way out is to go for
procuring the raw material in countries like Indonesia, Mozambique, Australia
and South Africa,” the analysts said.
India is already grappling with a severe coal crunch amid a
widening demand-supply deficit. The gap is pegged at 142 MT this fiscal and is
likely to increase to 200 MT by 2016-17. Since increasing production is not immediately
possible, the only way out is imports, an CIL official said on condition of
anonymity.
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