From the FT:
Coal India, the giant state-controlled mining group, has succeeded in boosting output by tens of millions of tonnes a year as part of the Modi government’s reforms — only to find its customers unwilling to buy it.
Piyush Goyal, power and coal minister, said at a business meeting in Kolkata that he had told S Bhattacharya, Coal India’s chairman, to work out how to sell unmanageably high stocks of the coal it had mined even if that meant cutting prices.
“We have come to a situation where we don’t have any more ability to stock coal,” he said, suggesting the company might have to cut back on the production it has battled to increase over the past two years.
For years Indian electricity consumers have complained about lengthy power cuts that were blamed on a lack of fuel for the coal-fired generating stations that supply most to the grid.
Today’s problems are different: generators have coal but are reluctant to sell power to bankrupt electricity distribution companies that have failed to pay their debts. Overall power demand is in any case sluggish because of the stagnant manufacturing sector.
…Coal India, which mines 80 per cent of the country’s coal, was told to more than double its output to 1bn tonnes a year by 2020. It duly increased production, mining 52.1m tonnes in December, up nearly 11 per cent on the same month of 2014.
Transport links are also being improved, and the government auctioned coal mine concessions to private investors after a scandal over opaque allocations of mining rights under the previous, Congress administration.
No saviour for Aussie coal after all.
