In H1 CY 2020 it is expected that the coal imports will see a decline due to the lockdown in the country and also because of governments stress on reducing import of coal for blending purpose and replacing it with domestic coal by thermal power plants
In H1 CY 2020 it is expected that the coal imports will see a decline due to the lockdown in the country and also because of governments stress on reducing import of coal for blending purpose and replacing it with domestic coal by thermal power plants
Nationwide lockdowns has disrupted the coal industry, with decline in Indian coal production and coal imports due to lack of demand
The lockdown imposed across the various countries due to novel COVID-19 outbreak has had a cascading effect on the coal sector. There was a significant drop in India’s coal import volumes due to both demand and supply side factors. The India’s coal import in March stood at 15.74 million tonne, which means a decline by 27.5% in comparison to last year. The major reason for the decline in coal imports is due to restrictions imposed at various ports in the wake of coronavirus outbreak in the country and also due to the declining demand of the thermal power plants as the renewable plants are given must run status. Coal India's daily average production in April has also halved from March and is down 11.3% versus April 2019, the world's largest coal miner produced an average of 1.34 million tonnes during the first 22 days of April, which less than per day production of April 2019 i.e 1.51 million tonnes per day. Electricity consumption has fallen 24.3 per cent compared with last year during the nationwide shutdown creating record high fuel stocks at utilities and prompting many power plants to avoid buying more coal.
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Key Highlights
The central government will give a fund of
INR 1,240 crore to Coal India’s exploration arm for two years up to 2021 to explore blocks that would be auctioned to commercial coal miners
INR 882 crore has been allocated to the coal ministry by the central government for the development of the coal sector.
Coal India will be investing more than INR 4000 crore in acquiring heavy earth moving machinery and procure its own wagons for coal transportation to consumers.
Report Insights
Coal India’s daily supplies to the power sector, its biggest consumer, has seen steep decline because of the weak power demand which has resulted in power companies to refuse taking deliveries since their stockyards are almost full. Other consumers also have huge stocks as many plants are shut due to countrywide lockdown.
The government is planning to roll out the next wave of reforms for attracting big-ticket investments from private players, domestic processing of minerals and substituting imported thermal coal with inventory of domestic output for building self-reliance in these areas.
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