New Delhi : The Chinese Government’s ban on coal imports from Australia is set to cause a major shift in the global coal trade. India and Indonesia are touted to be the biggest beneficiaries of this development – the former as it looks to import high-grade Australian coal and the latter taking over Australia’s role as a supplier to China.
Given India’s unprecedented demand for coal-powered thermal plants, it has been one of the strongest Asian markets for Australia, a trend that has inspired leading business organizations such as the Adani Group to set up the Adani Coal Project in Queensland. Apart from power generation, the high-grade Australian coal is put to use in India’s steel and cement factories, which form the backbone of the nation’s economy.
According to Lavi Coal Info, India became the second-biggest importer of Australian thermal coal in February, 2021. Australia’s share of India’s thermal coal imports rose to 20% in the first two months of 2021; a 4% rise from 2020. The increase in thermal coal imports will allow India to meet its growing energy requirements which are set to quadruple in the coming years.
Coal production is set to rise in the domestic front as well. Operations of major stakeholders like Coal India Ltd, EMIL and Adani coal projects among others, will ramp up the production. Much of India’s domestic coal production goes into power generation.
The prevailing situation is ripe for private players. One of India’s leading and diversified conglomerates, the Adani Group, has been a seasoned player in this sector. The group has won large Mine Develop & Operator contracts with the Parsa East & Kanta Basan and Gare Pelma III coal blocks each hosting an Adani Coal project. Coal shipped from the Adani Carmichael mine project would further contribute to the supply chain.
India needs to take advantage of this shift in the global coal industry and promote private players as crucial partners in this endeavor. This will ensure that the country has enough resources to meet its current as well as future demands.
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