Coal India Limited (CIL) is about to create history by turning into an exporter. Availability of surplus coal due to supply getting excess of demand has prompted CIL to look for export options.
Coal production in FY16 rose 8.5% to 536 MnT as a result of the slew of reforms implemented by the Coal Ministry. Speedy environmental clearance and land-acquisition were implemented by the ministry that helped production going up.
But, the higher production had resulted in stockpiles rising to 56 MnT at the end of the preceding fiscal as demand from power companies became lower due to the financially weak state distribution companies preferred cutting down their supplies rather than purchasing more power. However, the recent 10% rise in power production in the country has resulted in the stockpile reducing to 49 MnT.
To implement its export plan, CIL has zeroed upon Bangladesh as the initial target market. A team of CIL representatives recently visited Bangladesh to study the market potential. The findings are, however, not yet known.
In the context of CIL’s coal export plan, Anil Swarup, the Coal Secretary of India, said in a recent interview that Indian coal will be cheaper by 20-30% for buyers in Bangladesh than imports from Indonesia. As mining cost in India is the lowest in the world, Indian coal will be cost-competitive, he further said.
India’s NTPC Limited is currently setting up a 1,320 MW power plant in Bangladesh jointly with the Bangladesh Power Development Board. This project could be a potential customer for CIL in the initial stages.
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