KOLKATA (miningweekly.com) – Indian coal imports are likely to gain further momentum during the next three months, reversing a falling trend seen early in the financial year as more user industries are planning to up inward shipments to feed their fuel-starved captive power plants.

Several companies in the chemicals, medium scale steel mills, sponge iron units and aluminium smelting industries will be forced to resort to high cost imported coal in the face of lower supplies from domestic miners, at least three officials in industries operating captive thermal power plants have said.

While difficult to forecast exact imports, they say that user industries with captive power plants are receiving at least 50% less coal than their total requirement.

The rising momentum of imports to ride the current short domestic supplies could be gauged from preliminary industry estimates that indicate that imports during the first week of December were up 48% over the corresponding week of December 2016, against a rise of 40% during November 2017, compared with the corresponding month of previous year.

Underlining the nonavailability of coal, Indian Captive Power Producers’ Association chairperson Rahul Sharma said in a statement, “companies which produce electricity for their own use are being pushed towards costlier overseas purchase as they are getting barely half the supplies contracted for with Coal India Limited.”

“We are importing more and more coal adding to our input costs,” he added.

The reversal of trends in imports was threatening to knock the bottom off the Coal Ministry’s avowed goal of bringing down coal imports to nil over the next five years with domestic government-owned thermal power producers like NTPC already having stopped using imported coal at all its plants across the country.

The rising risk to such a goal was the 48% surge in coal imports so far this month, against the emerging trend of falling imports seen in June 2017 when imports were pegged at 18.22-million tons against 21.50-million tons in the corresponding month of the previous year.

Citing the impact of lower coal supplies to the aluminium sector, industry sources have pointed out the situation in National Aluminium Company Limited, which was receiving an average of 13 000 t/d of coal, against a daily requirement of 17 000 t/d for its captive power plant forcing the integrated aluminium producer to shut down three of its 120 MW captive plant last month.

The total installed capacity of captive power plants operated by all industries is estimated at 40 000 MW.