Reuters AlertNet Lite - India's coal demand may quadruple by 2031-minister

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India's coal demand may quadruple by 2031-minister

12 Mar 2007 08:27:32 GMT
Source: Reuters

MUMBAI, March 12 (Reuters) - India's demand for coal may exceed two billion tonnes a year by 2031-32, up from about 460 million tonnes a year now according to the country's minister for coal, Dasari Rao.

To ensure energy security, India "has taken steps in acquiring coal properties abroad," Rao said in a paper distributed at an industry event on Monday.

He did not attend the conference in Mumbai and the paper gave no further details on where the country was looking to invest in coal mining.

Rao said that the Indian government's Committee on Integrated Energy Policy recently noted that coal must maintain its current share in India's overall energy mix for the next 25 years if the country is to sustain economic growth at over 9 percent a year.

This will require the government to plan coal production and ensure there is adequate infrastructure for imports, which will need to rise to around 50 million tonnes a year within the next five years to bridge the gap between demand and supply, Rao said.

The boost in coal usage will also lead to rising carbon dioxide emissions, with the Indian subcontinent likely to be one of the regions worst hit by global warming.

New Delhi says it must use more energy to lift its population from poverty and that per-capita emissions are a fraction of those in rich states, though steeply rising emissions in the past decade have left it the world's fourth largest emitter of greenhouse gases, according to U.N. figures.

The growth of core Indian sector industries will continue to boost coal demand, Rao said. For example by 2011, cement production is likely to reach 251 million tonnes a year up from 156 million tonnes at present, he said.

Hot metal production will rise to 70 million tonnes a year from the current 33 million tonnes and coal-fired power generation capacity is expected to rise to more than double from the current level of 72,000 MW, he said.

India's current 17 million tonnes a year domestic coal production from captive blocks will rise to over 100 million tonnes in the next five years and the government is considering allocating more coal blocks to be linked to captive power plants.

There is scope for private investment in developing these blocks, Rao said.

There is also significant scope for investment in coal washing, he said. The government is placing special emphasis on the need to increase India's capacity to wash domestic coal to reduce its ash content and raise its calorific value, he said.

Moving unwashed, high-ash coal long distances by rail is extremely uneconomic because up to 35 percent of the tonnage transported is waste, Indian coal industry sources said.

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Last updated:Mon Mar 12 08:31:29 2007