COAL IMPORTS IN INDIA
Coal has been recognized as the most important source of energy for electricity generation in India. About 70% of Coal in the country is consumed in the power sector. In addition, other industries like steel, cement, fertilizers, chemicals, paper and thousand of medium and small scale industries are also dependent on coal for their processes and energy requirement. In the transport sector, though the direct consumption of coal by the railways is going down on account of phasing out of steam locomotives, the energy requirement for electric traction is still dependent on coal converted into electric power.
In the financial year 1998 – 1999, coal production (upto December 1998) was 206.31 million tons. About 88% of the coal production in India comes from collieries of Coal India Limited, which is the biggest supplier of coal in the country. During the same period (April to December 1998) the Power Sector consumed 134 million tons of coal. The steel sector has been the second largest consumer of coal in the above period, the steel sector consumed about 13.4 million tons of coal.
The Planning commission has in consultation with concerned ministries tentatively prepared demand for coal in the ninth plan period, but there is a wide variation between the demand estimates prepared by planning commission and the coal ministry. At eh end of the ninth plan, the demand supply gap would vary from 67.38 million tons to 17.60 million tons as per varying estimates.
COKING COAL
Coking coal reserves in the country are limited and only two to three percent of the total coal reserves in the country. Most of the coking coal occurs in Bihar. Among these deposits, the coal in Jharia has the highest property even though the ash content is inherently quite high (about 18% to 35%).
The problems in domestic coking coal have led to a steady increase in imported coal over the years. Beginning in the early eighties, when the import of coal was about 0.6 Millan MT/Annum, the coking coal import has risen to more than 10 million tons in 1997 – 98. The figures as stated by the Annuala Report of the Coal Ministry. 1998 – 99 are as follows :
There has been a rising of trend of imports for the last few years in case of coking coal especially in the coastal regions through which consumers are in position to directly import for further transshipment to plant sites.
Over the years the Vishakapatnam port has emerged as the largest importer of coking coal. Followed by Haldia and Paradip. Most of the imports of the coking coal take place on the eastern coast, as the logistics demands it to be so. Major users of the imported coal through the visage port are RINL and the Bhilai Steel Plant.
RINL alone imports more than one million ton per year. SAIL imports about 35% of its coking coal requirement that comes through these ports on the East Coast. The annual requirement of Imported coking coal is about one million tons for TISCO. TISCO imports its coal mainly from the Haldia and Paradip ports. RINL has plans to import 1.1. million tons of coking coal in the year 1992 – 2000 from Australia through Vizag port.
Despite the problem with Domestic coking coal SAIL does not expect to increase the proportion of imports to more than about 35% of its total intake. As a state controlled enterprise it is subject to take most or its entire requirement from domestic mines there are also cost advantages in using Indian coal, even though this is partly outweighed by the higher operating and maintenance costs resulting from the poor quality product from captive mines in Jharia and Raniganj coalfields controlled by SAIL subsidiary Indian Iron and Steel Company.
Tata Steel’s domestic supplies come from captive mines in Jharia and Bokaro coalfields, which produce about 2 mt/to 2.4 mt/ year following the commission in of two new wash plants in Bihar state. This will enable TISCO to continue the trend of reducing imports for the Jamshedpur mill as a part of a cost cutting effort. Purchases of foreign coal reached a peak of 800000 t in FY 1993 – 94. Nevertheless Tata Steel’s Plans for its new West Coast mill to be supplied entirely by Imported coal. The company has said that Australia will be the primarily supply source. At present Vizag uses imported coal for 60% – 70% of its requirement. Unless CIL makes improvement in its production methods and wash plant technology. It will become increasingly difficult to arrest the rising trends in imports.
China is the largest exporter of metallurgical coke followed by Japan, Poland, Australia, and Egypt. About 60% of the world’s exports are by China. However, as far as India is concerned the primary source of imported coking coal is Australia. Out of the 10.78 million tons imported in 1997 – 98 about 9.46 million tons were imported from Australia.
But import of Chinese coke has increased nine folds from 0.09 mt in 1992 – 93 to 0.81 mt. in 1996 – 97. This increase has primarily been on account of superior quality and declining CIF prices.
NON COKING COAL
Majority of non – coking coal reserves in India occur in thick interband seams and are of inferior quality. In response to the poor quality of non – coking coal receive by the power stations which leads to the critical problem of fly ash disposal, the ministry of Environment and forests issued Gazette Notification, ensuring clean coal supply to all power houses located beyond 1000 km of the coal fields. About 29% of the non – coking coal is transported beyond a distance of 1000 km from the coal fields. Under the same proposal, there would be a phased introduction of maximum 34% ash in power station feed between 2000 and 2004.
Imports of non – coking coal though far below that of coking coal. In the early ninetees have risen significantly in the latter half of the decade.
Coal based power stations and cement plants are also importing small quantity of non coking coal on consideration of transport logistics & commercial prudence as well as against export entitlements. Imports of non – coking coal have risen from a modest 0.57 million tons in 1993 – 94 to about seven million tons in 1997 – 98. The figures stated in the annual report of the coal ministry, 1998 – 99 are as follows :
EMERGING TRENDS IN IMPORT OF NON COKING COAL
Most of the imports are made from Indoneasia and South Africa through the West Coast ports of India to meet the huge demand of the power sector and at the industrial houses. There is also bulk coastal movement of thermal coal mostly from Haldia, Pradip and Vizag ports from the coal rich regions of Bihar, West Bengal, Bihar, Orissa and Andhra Pradesh to Southern ports (Tuticorin and Chennai) and western ports. Tamil Nadu Electricity Board consumes more than one million tons a month brought by the coastal route from Haldia, Paradip, and Vizag to Tuticorin and Chennai. In fact 1996 – 97, TNEB has imported 12.3 million tons of thermal coal via coastal movement.
The quality and the distance of rail haulage of coal are the two factors that lend an edge to imported coal over native coal. Most of the non – coking coal used in Indian Power Plants has a Gross Calorific Value (GCV) of about 3,400 Kcal/kg. On the other hand imported coal has a Gross Calorific Value (GCV) of about 6700 kcal/kg. The native coal has a fly ash content of about 34% on an average. On the other hand in the imported coal (Australian as well as U.S.), the ash content is well below 14%. The cost of transportation for importation for imported coal is just $ 17 per ton. High content of fly ash also leads to higher cost of transportation as to obtain the same input of fuel a higher amount of coal is consumed. There may be a few exceptions like the BSES power plant coming up in the coastal district of Dahanu in Maharashtra, where coal will be used from washeries in Madhya Pradesh about 1100 kms away.
A look at the proposed independent coal fired power plants would suggest a sizeable increase in import of non – cooking coal. The ones in which the likely source of coal is going to be imports are listed below
Thus the rising trend seen the imports of non – coking coal over the last give years can be expected to continue and in a couple of years imports of non – coking coal may be as significant as that of coking coal.
IMPORTS OF COAL AND THE MARITIM SECTOR
As observed above there has been a trend of risign imports in the case of coking as well as non – coking coal. While the coking coal imports have declined temporarily due to the recession in the steel industry, the import of non coking coal has risen significantly. Also as projected above three will be a demand for greater quantities of imported non – coking coal also. The Indian maritime sector has to factor in these trends into future commodity flow estimations. As of now the ports are already functioning above the saturation mark in terms of their coal handling facilities. A look at the table below suggests the scenario in 1998.
The above data clearly indicates that even with the current level of imports the coal handling capacities at the various ports are being over utilized. Given the evaluations carried out in this discussion and the likely surge in the imports as projected from the trends in the previous years, there would be a need to set up more transport infrastructure for the import of coking as well as non – coking coal in the near, future.