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India’s dependence on coal imports will grow

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World Coal,

India’s dependence on coal imports will grow in coming years, particularly after the country’s Supreme Court ruling that all 218 coal mining licences awarded between 1993 and 2010 were illegal, said Business Monitor International (BMI) in a recent note.

“While only 30 out of the 218 coal mining blocks have been developed, an outright cancellation of these mining operations (scheduled for further hearing) will deal a hard blow to both the domestic power and steel sectors,” BMI said, as many Indian utilities are already battling with depleted coal stockpiles that have continued to stifle their power generation capacity.

The July 2014 decision by India’s government to double the tax on both coal imports and production will also further damage the sector.

“Our core view remains that India will absorb more seaborne coal over our forecast period to 2018,” concluded BMI. “Energy poverty will remain a key concern in the country and coal will be the only realistic option to proving base-load energy for the local population over the medium term. Infrastructure deficits, significant regulatory and bureaucratic hurdles will continue to impede production from state-owned miner Coal India Ltd (CIL).”

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