India plans to reduce its thermal coal imports significantly in the “next few years” to save foreign exchange markets and create jobs through the development of existing and new coal blocks, a senior official in the Federal Coal Ministry said on Tuesday.
Coal is among the top five raw materials imported by India, the world’s largest consumer, importer and producer of fuel after China.
India spent 1.58 trillion rupees ($ 21.28 billion) on importing 247 million tonnes of coal, including 197 million tonnes of thermal grade, in the fiscal year to March 2020, M. Nagaraju, a joint secretary of the Ministry of Coal, told a seminar.
“According to our estimate, we can actually replace between 110-120 million tonnes of coal. We will not be able to this year, but certainly we will do so in the next few years,” Nagaraju said without providing more detailed information. .
He said increased local coal production would help improve the economies of states in central India where most coal mines are located.
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To increase local production, India launched in June an auction of 41 coal blocks with an annual production capacity of almost a third of total national production.
The blocks offered with generous commercial terms are also aimed at attracting foreign investment into a sector dominated by the state-owned Coal India Ltd.
Prime Minister Narendra Modi wants India, with the world’s fourth largest coal reserves, to be a net coal exporter.
India’s demand for thermal coal this year has fallen due to the economic contraction triggered by shutdowns to slow the spread of the new coronavirus.
“The future of coal is not as bright as before, but it is not as bleak as some people might say because coal remains a major player in the country’s energy mix for at least the next 30 years,” Nagaraju said.