Coal supply in India to fall 137 million tonnes short of demand in 2011-12

The demand for coal in the country is expected to be around 696.03 million tonnes in 2011-12 against the projected domestic coal production of 554.00 million tonnes, leaving a gap of 142.03 million tonnes, as per the annual Plan projections for the financial year 2011-12.

Coal India Ltd, the top producer of coal in the country, is expected to liquidate 5 million tonnes of its reserves, bringing down the supply gap to 137 million tonnes. The remaining gap of 137 million tonnes, however, will have to be met through imports unless domestic production increases significantly.

Apart from a series of measures initiated by Coal India Ltd (CIL) and Singareni Collieries Company Ltd (SCCL), the government has allotted 208 coal blocks to private and state-owned companies to increase domestic supply of coal to various consumers, including power units, minister of state in the ministry of coal Pratik Prakashbapu Patil informed the Lok Sabha today.

He said the government has constituted a group of ministers to go into the issue of restricted/prohibited areas pertaining to the issue of "Go" and "No Go" mining zones proposed by the ministry of environment and forest.

Coal prices have been fully deregulated from 1 January 2000 and producers are fixing the price of coal themselves from time to time on the basis of market forces like demand, increase in the input costs and change in the landed price of imported coal, he said.

The increase in coal prices is also benefiting governments of coal bearing states through enhanced royalty. The royalty paid by Coal India Limited and its subsidiary companies has increased to Rs4,599.24 crore in 2009-10 from Rs1,897.78 crore in 2000-01, he pointed out.