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India’s energy requirements and consumption have grown exponentially, increasing by around 700 per cent over the last 40 years. According to the Australian Bureau of Agricultural and Resource Economics, all indications point to this trend continuing.
“In our recently released March Australian Commodities publication we’ve assumed an economic growth rate in India of about eight per cent out to 2013,” ABARE senior commodity analyst Alan Copeland said.
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“That’s going to encourage, from a coal perspective, an increase in steel production and also an increase in electricity demand and a lot of that electricity demand is going to be met with coal-fired power stations.
“Indian imports of coal were around about 30 million tonnes in terms of thermal coal and around 22 million tonnes of metallurgical coal in 2007 and we expect both of those to grow significantly out to 2013,” Mr Copeland said.
Currently, coal generates around 70 per cent of India’s energy needs. The Indian Ministry of Coal has reported total hard coal reserves in the order of 246 billion tonnes, and, according to the BP statistical review of world energy reserves, at the end of 2006 India had proven reserves of 92 billion tonnes.
However, due to the relatively poor quality of domestic supplies, India is likely to remain heavily dependent on imports.
“Almost all of its metallurgical coal needs are imported,” Mr Copeland said.
“On the thermal coal side of things, imports have increased rapidly over the last couple of years and we expect that trend to continue.
“Firstly, the quality of Indian coal is not great. Sometimes there’s a high ash content and low energy content, so imported coal is used to blend with local coal as a way of lowering the ash content and increasing the energy content.
“Secondly, domestic rail transport in India can be a constraint on the movement of coal from producing to consuming regions so distance and reliability can make it more cost-effective to actually import coal.
“And thirdly, simply over the last few years, demand for coal, particularly for thermal coal has increased at a much faster rate than supply has increased.”
Former Australian minister for trade, Mark Vaille saud in a 2006 speech that India was, at the time, Australia’s sixth largest export market, having grown faster than any of Australia’s top 30 markets in the five years up to 2006.
With an average annual growth rate of eight per cent, India’s metallurgical coal imports are predicted to be up to 70 million tonnes per annum by 2025.
“In 2007 Australia exported around 22 million tonnes of coking coal to India,” Mr Copeland said.
“That represented about 16 per cent of Australia’s total coking coal exports and accounted for over 90 per cent of India’s coal imports.
“On the thermal coal side of things, Australia exported, (to India) in 2007, around about half a million tonnes of thermal coal out of about 30 million tonnes (of imports).
“Indonesia exported about 70 per cent of India’s coal needs and South Africa exported a further 20 per cent to India. So Indonesia is by far the largest exporter of coal to India and while India’s thermal coal imports are expected to grow rapidly, a large proportion of this is expected to be met by Indonesia.
“Certainly, from an Australian point of view, the growth in coking coal imports into India is going to provide further market opportunities for Australian coking coal exporters.”
“In our recently released March Australian Commodities publication we’ve assumed an economic growth rate in India of about eight per cent out to 2013,” ABARE senior commodity analyst Alan Copeland said.
.
“That’s going to encourage, from a coal perspective, an increase in steel production and also an increase in electricity demand and a lot of that electricity demand is going to be met with coal-fired power stations.
“Indian imports of coal were around about 30 million tonnes in terms of thermal coal and around 22 million tonnes of metallurgical coal in 2007 and we expect both of those to grow significantly out to 2013,” Mr Copeland said.
Currently, coal generates around 70 per cent of India’s energy needs. The Indian Ministry of Coal has reported total hard coal reserves in the order of 246 billion tonnes, and, according to the BP statistical review of world energy reserves, at the end of 2006 India had proven reserves of 92 billion tonnes.
However, due to the relatively poor quality of domestic supplies, India is likely to remain heavily dependent on imports.
“Almost all of its metallurgical coal needs are imported,” Mr Copeland said.
“On the thermal coal side of things, imports have increased rapidly over the last couple of years and we expect that trend to continue.
“Firstly, the quality of Indian coal is not great. Sometimes there’s a high ash content and low energy content, so imported coal is used to blend with local coal as a way of lowering the ash content and increasing the energy content.
“Secondly, domestic rail transport in India can be a constraint on the movement of coal from producing to consuming regions so distance and reliability can make it more cost-effective to actually import coal.
“And thirdly, simply over the last few years, demand for coal, particularly for thermal coal has increased at a much faster rate than supply has increased.”
Former Australian minister for trade, Mark Vaille saud in a 2006 speech that India was, at the time, Australia’s sixth largest export market, having grown faster than any of Australia’s top 30 markets in the five years up to 2006.
With an average annual growth rate of eight per cent, India’s metallurgical coal imports are predicted to be up to 70 million tonnes per annum by 2025.
“In 2007 Australia exported around 22 million tonnes of coking coal to India,” Mr Copeland said.
“That represented about 16 per cent of Australia’s total coking coal exports and accounted for over 90 per cent of India’s coal imports.
“On the thermal coal side of things, Australia exported, (to India) in 2007, around about half a million tonnes of thermal coal out of about 30 million tonnes (of imports).
“Indonesia exported about 70 per cent of India’s coal needs and South Africa exported a further 20 per cent to India. So Indonesia is by far the largest exporter of coal to India and while India’s thermal coal imports are expected to grow rapidly, a large proportion of this is expected to be met by Indonesia.
“Certainly, from an Australian point of view, the growth in coking coal imports into India is going to provide further market opportunities for Australian coking coal exporters.”
